MEXICO CITY, Nov 28: Mexico’s state-run oil monopoly Pemex will likely discuss a potential stake in Argentina’s massive Vaca Muerta shale deposit next month, a member of the company’s board said on Wednesday.
This comes after the CEO of Argentina’s national oil company YPF, the biggest stake holder in Vaca Muerta, said he hopes to enter into an agreement with Pemex to help develop the shale oil and gas field in Argentina’s southern Patagonia region.
Pemex’s board member, Hector Moreira, expects a possible deal to help develop Vaca Muerta to be discussed at the firm’s next board meeting on Dec. 19.
‘I would expect that the company CEO (Emilio Lozoya) will inform’ the board of his thinking on Vaca Muerta at the meeting next month, said Moreira.
‘There’s interest from YPF, there’s interest from Pemex, but nothing has been finalized,’ he added.
Moreira said Vaca Muerta could provide Pemex with valuable shale experience and technological know-how that the Mexican oil giant currently lacks.
It would also help meet Pemex’s goal to venture out beyond Mexico’s borders in search of new opportunities, Moreira said.
YPF estimates that the onshore Vaca Muerta deposit contains 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas, making it one of the biggest shale reserves in the western hemisphere.
Despite Vaca Muerta’s potential, so far only Dow Chemical Co and U.S. Oil company Chevron Corp have agreed to invest in the project.
George Baker, the publisher of industry newsletter Mexico Energy Intelligence, cited Pemex’s work in Argentina in the 1990s as evidence that there could be a natural partnership between YPF and Pemex so long as a favorable resolution is reached between Spain’s Repsol and Argentina.
The board of Repsol unanimously agreed on Wednesday to start formal talks with Argentina over a compensation offer for the YPF assets Buenos Aires seized last year.
The deal being negotiated will open opportunities for foreign companies to invest in Argentina’s vast untapped oil and natural gas resources.
‘Pemex could gain valuable experience onshore in Argentina if they were in association with a company that is experienced,’ Baker said.
He added that Pemex is unlikely to attract private sector investment to develop its own ample but largely untapped shale resources due to high political risks.
Pemex would probably be better off, he said, if a broad energy reform is passed by Mexico’s Congress that could lure experienced U.S. Oil companies to northern Mexico, where the booming Eagle Ford shale deposit in Texas likely extends.
‘What Mexico really needs is to find a way to get all those small-cap and mid-cap companies operating in Texas to bring their expertise across the border,’ said Baker. (agencies)
&&&&
Follow our WhatsApp channel