S&P Global Platts’ Bunkerworld quoted Haynes and Boone, LLP Partner Nicolas Borda in a report about Pemex, Mexico’s government-owned petroleum company, cancelling its Maximino-Nobilis deepwater farmout.
S&P Global Platts reported that Pemex blamed low oil prices and competition from Brazilian hydrocarbon auctions and that many companies interested in the farmout were obligated to other projects.
The report said that Borda, a partner at the law firm of Haynes Boone in Mexico City, told S&P Global Platts on Friday the terms of the contracts combined with the factors mentioned by Pemex shied investors away.
“It is a complex geological field in ultradeep water with a lot of gas. That in my view made operators think twice about participating,” Borda said.
An oil and gas sector specialist, Borda said Pemex could have improved the general terms of the project like the carryover structure.
“Operators are willing to take risks as long as they can also take the rewards,” he said.
Pemex is now going to focus on smaller farmouts with less geological complexity and fewer capital requirements such as its series of onshore farmout clusters, the report said.
“Instead of focusing on one big lobster, Pemex is going to go after 40 shrimps,” Borda said. ...
Excerpted from S&P Global Platts Bunkerworld. To read the full article, click here. (Subscription required)