Tablet Business

Head of Pemex expects hundreds of companies to seek Mexico’s oil

The head of Mexico’s national oil company said he foresees “hundreds” of new entrants in his nation’s energy industry after historic reforms.

Emilio Lozoya, who was named 18 months ago to head Petroleos Mexicanos, or Pemex, said a huge amount of money and expertise is needed to reverse his country’s decline in oil and gas production in the past decade.

In comments at the IHS CERAWeek energy conference in Houston on Monday night, Lozoya estimated that it will take $1 trillion over the next decade.

In December, Mexico reversed its 75-year history of excluding foreign operators from its energy reserves, an era that started when the industry was nationalized in 1938.

The opening of oil fields is proceeding in phases. The so-called Phase Zero is expected to take place this year as Pemex selects which properties to develop. Then foreign operators can negotiate with either Pemex or Mexico’s government over the right to develop other properties.

Lozoya said he would be pleased to see hundreds of operators enter that competition and become active in Mexico. The goal is to boost its crude oil output by 2018 to 3 million barrels a day from the current 2.5 million barrels, he said.

Mexico hopes to realize employment gains as work in its oil and gas fields grows, he said, drawing encouragement from the job increases seen in the United States from the development of shale reserves in North Texas and elsewhere.