Grupo Mexico,one of the nation’s largest mining and railroad corporations,has announced a $1 billion partnership with Mexico’s national oil firm Pemex,Reuters reported. The investment dollars will involve a wide variety of contracts and joint ventures,carried out over the next five years.
According to Ricardo Arce,crude output from the ventures will reach as high as 100,000 barrels per day over the next ten years or so,but he also emphasized that experts will ensure that new oil sector investments are safe bets.
“We’re interested in exploring for and producing oil,but that doesn’t mean we’ll stop being a conservative company.”
Grupo Mexico is one of the nation’s largest conglomerates and is involved in mining,transportation and infrastructure projects. Owned by secretive billionaire German Larrea,the company is perhaps best known for its involvement in base metals production.
Arce added that he expects to see a variety of new growth opportunities resulting from the major energy reform legislation Mexico finalized in 2014,as well Grupo Mexico’s first-ever joint ventures with Pemex. In addition,the second Mexico oil auction for drilling rights was recently a resounding success,awarding three contracts to an Argentine-led consortium that includes U.S.-based Fieldwood Energy and BP,as well as Italian national oil company Eni International and another consortium involving Fieldwood and Mexico’s own Petrobral won the third.
Grupo Mexico has reportedly already drilled for Pemex at offshore fields Ayatsil-Tekel-Utsil and Bolontiku-Sinan,and expects to compete for those again,as well as for onshore projects at Samaria,Cardenas and Mora,in association. According to Arce,Grupo Mexico also plans to compete by itself for the operation of onshore contracts that will be offered as part of the next phase of the Round One oil tender that is set for December of 2015.
“We’ve just selected five fields where we’re deeply analyzing the prospects to determine which ones we’ll bid on and how much we’ll offer. I expect each project to require investments of between $20 million to $30 million.”
Arce revealed that Grupo Mexico plans to compete next year to develop oil projects in Mexico’s complex Chicontepec Basin,which is an area that the corporation has extensive experience working in. The new joint venture with Pemex will reportedly incorporate a 15 to 20 percent reduction in day rates for the five offshore production platforms it is currently leasing from Pemex,which will equate to about $50 million in lower rates by May of 2016.