PetrÃ³leos Mexicanos (Pemex) and the Australian company BHP Billiton signed today an agreement to develop the deep-water Trion Block during an event hosted by the President of Mexico, Enrique PeÃ±a Nieto.
This is the first farm out agreement that Pemex has undertaken to explore and produce and is the result of a greater degree of flexibility and mechanisms stemming from the Energy Reform. The Trion Block, discovered by Pemex in 2012, has 3P reserves totaling 485 million barrels of crude oil equivalent, meaning that this is a commercially viable venture.
President PeÃ±a Nieto commented said that the Energy Reform not only opens new investment possibilities to private companies, but that it gives Pemex an opportunity to modernize itself. This type of association that Pemex today kicks off will allow Pemex to reinvent itself in the next years, he emphasized.
Also, he recognized the workers of Pemex for the efforts undertaken to date, which has allowed the company to improve its financial situation.
With regard to this partnership, the CEO of Pemex, JosÃ© Antonio GonzÃ¡lez Anaya, commented on how it represents a milestone in the history of this State-run company, given that, for the first time ever, a field, which was assigned during Round Zero by the Ministry for Energy, will be developed in partnership with a global leader in the industry.
He explained that this partnership will enable Pemex to continue aligning its operations with international best practices, in addition to sharing financial, technological and geological risks. This alliance strengthens Mexico, he added.
The CEO of BHP Billiton, Andrew Mackenzie, stated that this agreement was a historic moment for Mexico and the beginning of a new chapter in the working relationship between BHP Billiton and Pemex.
â€œIt is an honor to be the first international company to work alongside the people of Mexico in developing their oil resources, ensuring mutual benefit for all,â€ commented Mackenzie.
BHP Billiton is the one of the worldâ€™s biggest mining-oil company in the world, with more than 15 years of history and presence in 12 countries. It has successfully developed oil fields on the US side of the Gulf of Mexico and has one of the lowest accident indexes in the industry.
PEMEX is the worldâ€™s number 9 company, internationally recognized for its results in shallow waters and onshore fields. It has more than 70 years of experience exploring Mexican territory, and 15 years systematically exploring Perdido.
In June, Pemexâ€™s Board of Directors approved the development of the Trion Block, which Pemex had been assigned, with this partner. On July 27th, the Mexican National Hydrocarbons Commission (CNH) approved the terms and conditions for the bidding process, which took place on December 5th. The winner of this transparent and competitive process was BHP Billiton.
Trion has a depth of more than 2,500 meters, and is located 200 kilometers east of Matamoros, Tamaulipas, and 40 kilometers from the maritime boundary of the Gulf of Mexico.
The development of the project, as a whole, will require an investment of US $11 billion, and it is estimated that primary production will begin in six or seven years, with more than 100,000 barrels of crude oil equivalent per day.
The exploratory studies will be undertaken jointly by the Pemex-BHP Billiton consortium and will provide further information about the existing and potential reserves.
The event, held at the Presidentâ€™s Official Residence, Los Pinos, was attended by the Minister for Energy, Pedro JoaquÃn Coldwell; the Chairman of the CNH, Juan Carlos Zepeda; President Operations, Petroleum at BHP Billiton, Steve Pastor; the President of BHP Billiton Mexico, Timothy Callahan; the Director of Pemex, Exploration and Production, Javier Hinojosa; the Australian Ambassador to Mexico, David Engel; and the Secretary General of the STPRM, Carlos Romero Deschamps.
As Pemex takes on new challenges in deepwater exploration and production, the company begins a new era.With these type of alliances Pemex advances the implementation of its energy reform, which allows us to work together in favor of Mexico.