Pemex to seek partner for next deepwater project requiring some US$10.7 bn

Mexico’s state-owned oil company Petróleo s Mexicanos (Pemex) is looking for a partner to develop the coveted Nobilis-Maximino deepwater project that will need some US$10.7 billion in investment. The deepwater project could eventually add 174,000 barrels of new output per day, a senior regulator said.

The auction to choose a partner for the joint venture will likely coincide with a previously scheduled deepwater auction set for January 31, according to top oil sector regulator Juan Carlos Zepeda.

The first commercial barrels from Nobilis-Maximino are seen by 2024, with peak output of 174,000 barrels of oil equivalent (boe) and 265 million cubic feet of natural gas per day coming online in 2026.

Zepeda leads the National Hydrocarbons Commission, the upstream regulator that both runs the auctions and supervises new contracts.

“Presumably, the (Nobilis-Maximino) contract will be identical to the Trion contract,” said Zepeda, referring to the deal inked between Pemex and Australia’s BHP Billiton to develop the nearby Trion deepwater project, also located in the Gulf of Mexico’s Perdido Fold Belt.

BHP Billiton won the rights to be Pemex’s Trion partner last December, beating out Britain’s BP.

A sweeping energy reform finalized in 2014 ended Pemex’s decades-long production monopoly while simultaneously allowing the company to enter into first-ever joint venture partnerships in a bid to attract more investment and reverse a 13-year output slump.

Estimated reserves in Nobilis-Maximino are about 502 million boe compared with 485 million boe in Trion.

Nobilis-Maximino is also closer to the US-Mexico maritime border, which would likely make building transportation infrastructure faster and cheaper.

Zepeda said production costs for Nobilis-Maximino should average about US$27 per barrel, less than Trion’s roughly US$30 per barrel.

Exploration expenditures so far allocated by Pemex for Maximino-Nobilis total about US$1 billion, covering six exploration wells and three delimitation wells already drilled.

Pemex executives have previously said the firm expects its partner to include past investment in the joint venture’s cost structure, so the Mexican oil giant would not have to put in additional capital until the partner reached that threshold.

Equity partners for Pemex on three other joint ventures, or farm outs, are set be selected in October, two onshore projects and another in shallow waters, and Zepeda said still more are planned.

New partnerships should be expected to be launched this year, he said. Some farm outs may be awarded this year and others in the first semester of next year, Zepeda added.