Can you discuss the main changes that the energy reform is bringing about for PEP?

The changes brought about by the energy reform mainly concern operational aspects. Prior to the reform, Petróleos Mexicanos (PEMEX) had a constitutional mandate, the responsibility, and the obligation to explore all of the Mexican territory. However, after the reform, they were only awarded a portion of all the prospects, which amount to 112 billion barrels of oil equivalent. Out of these prospects, PEP requested 34.5 billion barrels, or 31%, and were awarded 22.1 billion barrels, representing around 22%. As a result, there is a reduction of responsibility, which gives PEP the opportunity to be more focused, and they are adjusting their operational structure for exploration. With regards to production, PEP was awarded 30 billion barrels out of the 43 billion barrels the country has. This enables PEP to reorganize internally in order to exploit these fields more efficiently.

How is PEP allocating its budget?

In 2014, the Secretary of Finance authorized 300.5 billion pesos, which is approximately US$22 billion. Of this amount, about 30.5 billion pesos ($2.2 billion) were dedicated to exploration, while the rest, 271 billion pesos ($20 billion), went to exploitation. For 2015, PEP has requested a similar volume of about 299 billion pesos that will go to the exploratory basins and the production areas that were assigned to them in Round Zero. PEP is focusing on the northeast and southwest marine fields, Abkatún-Pol Chuc, Ku-Maloob-Zaap (KMZ), Cantarell, and the Tabasco coast. These areas, as well as Tsimin-Xux, are where most of the expenditures for the production of light crude are being placed. PEP is also investing significantly in the south region, a producer of light and extra-light crude, in their main projects: Cinco Presidentes, Samaria Luna, Bellota-Jujo, and Macuspana-Muspac. There are also smaller investments going to gas-producing fields and crude fields that were assigned to them in the north of the country. In the north region, PEP has also been working with third parties through public works contracts, but they hope to migrate towards the new shared production contracts that the energy reform contemplates.

What is PEP’s preferred model for working in partnership with foreign companies?

PEP has identified 10 projects in which they want to sign joint ventures with companies that have technical expertise, experience or financial means. These projects include three mature fields onshore, Ogarrio, Cárdenas Mora, and Rodador; three mature shallow-water fields with historical production, Bolontikú, Sinán, and Ek; an area of extra-heavy oil fields, Ayatsil-Tekel-Utsil; deepwater gas-producing fields of Piklis and Kunah; and in deepwater oil areas, in the northern area of the Perdido belt, the Trión and Exploratus fields. PEP is interested in being the operator because of their experience, with the exception of deepwater fields. They will most likely choose not to be the operators in Trión and Exploratus, but may want to be in control in the second or third deepwater project after gaining experience.

How do you envision the evolution of Cantarell, KMZ, and Chicontepec in the medium term?

Cantarell has had a declining trend for the past decade, but it remains a significant field with a 35-year history of production since June 23, 1979. Despite its current yield of around 350,000 barrels per day, down from its peak of over 2 million barrels per day, there are still significant volumes of oil that can be extracted from the field. It is currently the second largest producing field after KMZ, which produces 850,000 barrels per day. Given this, Cantarell will continue to be a priority for us in the medium term.

As for KMZ, it is the country’s main producing field, and we will continue to prioritize its management and energy utilization. Drawing from our experience in Cantarell, we will aim for a more efficient exploitation of KMZ’s resources.

Chicontepec is a field with vast reserves, estimated to be over 16 billion barrels of oil equivalent, which accounts for nearly one-third of the country’s total reserves. However, exploiting these resources requires a deep understanding of the geology and extraction methods. Similar fields worldwide have taken between 10 and 20 years to fully capitalize on their assets, and we are committed to continuing our investment in this area to efficiently produce competitive barrels of oil.