HOUSTON—Mexico's state-run oil firm Pemex could delay to next year a call to energy companies to form joint ventures planned for October, amid government complaints that firms have not invested quickly enough to make good on the promises of the energy reform, the country's energy secretary said on March 13.
Pemex has so far had mixed results in its strategy of finding foreign partners to form joint ventures. In 2016, BHP Group was chosen to partner with Pemex in the country's flagship offshore project Trion.
But some later auctions failed to attract oil and gas companies as bidders, and others were delayed.
Oil firms have only invested $800 million out of the billions of dollars committed to over 100 new Mexican energy projects, Rocio Nahle told journalists at CERAWeek by IHS Markit.
"They must comply with what the law says in terms of timelines, otherwise they will have to return" licenses and contracts, Nahle said.
Mexico is under pressure to boost the country's oil output and strengthen Pemex following a long-standing production decline that reduced the oil firm's crude output to 1.62 million barrels per day (bbl/d) in January, below the 2019 target. Crude exports were 1.07 million bpd.
Pemex pumps almost all the oil produced in the country, but following the nation's opening of its energy markets, authorities expect foreign firms to contribute more barrels as fast as possible to ease an energy trade deficit.
"Pemex has its own project of drilling 116 wells. As that project develops, it will decide if farmouts (joint ventures between Pemex and foreign partners) will be called this year or next," the secretary added.
Pemex will award service contracts to drill the mature and abandoned wells, according to Nahle.
Low refining rates increasingly are forcing Pemex to import over 800,000 bbl/d of gasoline and other refined products, according to official data, even as the government strives to minimize fuel theft.
The energy secretary is pushing forward a $6 billion to $8 billion project to build a new refinery in the state of Tabasco and will begin the auction process in coming days.
An initial budget of about $2.5 billion this year will go toward procuring equipment, Nahle said.
"We will do our best (to move fast) because when a project gets delayed, it costs more," she added.
Pemex also plans to refurbish its existing refineries this year with the goal of make them work at 70% of their 1.6 MMbbl/d capacity compared with the current 37%.
Pemex also plans to add catalyzers to three of Pemex's refineries to decrease sulfur content in its fuels, especially marine fuel, to meet the international IMO 2020 rule.
Splashy mergers worth billions dominated the talk, but many companies spent 2018 playing it safe as E&P executives fretted over trade, interest rates, demand for oil, how to please investors and how long better times would last.
The middle class of E&P companies is shrinking as consolidators target companies valued between $3- and $10 billion, leaving dozens of lesser-valued companies to sweat as access to public equity markets remains blocked and oil prices recede.
The beginning of February brought a sense of just how off-kilter 2019 is setting out to be.