Mexican state energy company Pemex and the team of billionaire investor Carlos Slim are currently engaged in discussions aimed at reviving the development of Mexico’s initial deepwater natural gas field, which had previously been put on hold twice, according to information from two sources disclosed to Reuters.
Executives from companies affiliated with the Slim family reportedly met with Pemex on Tuesday to deliberate on the Gulf of Mexico gas field. One of the sources indicated that both parties have agreed to reconvene for further discussions.
The Lakach field has been identified as a promising entryway into a new deepwater gas frontier in Mexico. Sources revealed that Pemex has prioritized securing a new partner after its previous partner withdrew from the project at the close of last year.
Pemex aims to advance the offshore field through a service contract model where partners provide upfront project financing, a practice employed prior to the opening of the country’s energy sector, as per one of the sources.
It remains uncertain whether Pemex and Slim’s entities intend to progress with the project independently or if additional collaborators will be involved. The sources mentioned that Pemex has also reached out to other companies for potential participation.
At present, Pemex has not responded to requests for comments, while a spokesperson for Slim declined to provide a statement.
Slim, whose business empire spans telecommunications, mining, and retail sectors, has been expanding his involvement in the energy industry since last year, acquiring stakes in shallow water fields such as Zama, Ichalkil, and Pokoch.
During a rare public appearance in Mexico City last month, Slim expressed interest in partnering with experienced entities.
Slim holds interests in various companies that could potentially engage in the Lakach field project, including construction firms FCC and IDEAL, as noted by one source present at the Tuesday meeting.
Nevertheless, both sources highlighted that Pemex and Slim are likely to require the expertise of another company specialized in deepwater operations.
In November, Reuters reported that Pemex and U.S.-based liquefied natural gas company New Fortress Energy terminated a collaboration agreement for the field due to disagreements on terms, including pricing.
President Andres Manuel Lopez Obrador views the Lakach field as crucial for supplying essential gas to Mexico and advancing the nation towards energy self-sufficiency. Situated approximately 90 kilometers (56 miles) from the Gulf port of Veracruz, the field is estimated to hold around 900 billion cubic feet of gas.
To date, Pemex has invested $1.4 billion in the project. Previous plans to extract gas from the field were shelved in 2016 due to cost concerns.
Challenges have also emerged between officials from the oil regulator and Pemex regarding the development of the Lakach field.
Internal assessments conducted by the regulator between 2015 and 2022 raised doubts about the economic viability and technical feasibility of the project. Officials called for additional information from Pemex on risk mitigation programs and project success guarantees.
Concerns were raised about a lack of deepwater gas expertise, incomplete field studies and infrastructure assessments, sunk costs, profitability amid low gas prices, uncertainty over gas reserves volume, conflicting assessments of proven reserves, and deviations in trial results from Pemex’s projections.