After a raucous session in which leftist lawmakers took over the podium, Mexico’s Chamber of Deputies approved constitutional reforms designed to depoliticize the state-owned oil company, Petroleos Mexicanos, or Pemex, which has been politically controlled throughout its history.
Under the plan, professionals will be named to the Pemex board of directors, now packed mostly with political appointees, and oversight committees will be established for the various Pemex subsidiaries.
That will nudge Pemex closer to the model of Brazil’s state-owned oil company, Petrobras, industry experts say.
To help Pemex acquire the expertise to develop its fields, the law will give the company greater leeway in contracting with oil field service companies, including allowing it for the first time to provide incentives such as performance bonuses.
A number of Houston’s service companies — including Schlumberger, BJ Services, Weatherford International and Halliburton — already work in Mexico.
Earlier this year, Houston-based Baker Hughes was awarded a $460 million contract to drill 15 offshore wells for Pemex.
“We’re excited about our relationship with Pemex, and we look forward to expanding that relationship and introducing new technologies to help Pemex develop the natural resources of Mexico,” Gary Flaharty, Baker Hughes’ director of investor relations, said Wednesday.
The new law, however, continues the long-standing prohibition on private firms owning the country’s oil and natural gas resources. That means no production-sharing contracts with the international oil companies.
“They reinforced the restrictions on private investment,” Franco said. “What was implicit is now explicit.”
As in many countries, Mexico’s mineral wealth is considered national property. But Mexico’s tight hold on its petroleum resources has been a particularly acute source of patriotic pride since the oil industry was nationalized in 1938.
Mexico’s refusal to budge on that aspect of its law was disappointing news for the major oil companies, which would like to help develop the country’s oil and natural gas resources.
As it stands, the change in the law wasn’t enough to generate interest among the majors, said Red Cavaney, head of the American Petroleum Institute, a Washington-based industry trade group.
The Mexican government relies on Pemex to fund nearly 40 percent of its budget. But Pemex’s oil production has been plummeting, as the huge Cantarell field in the southern Gulf of Mexico has begun to play out.
Mexico’s oil output, about half of which goes to U.S. Gulf Coast refineries, dropped to 2.7 million barrels a day in September, its lowest level in 13 years. PFC Energy estimates production will slip further to an average 2.6 million barrels a day next year, and Franco suspects that figure may be optimistic.
“We really don’t see a plateau on Cantarell’s decline,” Franco said.
Author: Jo Amey
