Pemex’s Farmout Strategy: International Expectations

Pemex’s Farmout Strategy — International Expectations: The logic and terminology of Pemex’s deep water strategy

pemex-contentsPublic Policy Perspective 10036 — On account of the importance of this topic for the future of Pemex in deep water blocks, we are making this report a public policy document that is publicly available.

As far back as July 2014—three weeks before the promulgation of the energy reform legislation—Pemex told Reuters about its plans for farmouts, using a term that had scarcely been heard before in Mexico. During the following 15 months Pemex identified blocks that would be candidates for farmouts. Together, these blocks covered some 525,000 acres with an expected investment of some $50 billion. This report is an examination of the nature of a farmout agreement, its core concepts and terms. In a separate report, we shall examine the legal issues to be resolved before a farmout agreement can be signed.

Exhibit A is a glossary of key terms associated with a farmout agreement.

Exhibit B is a sample letter of inquiry from an oil company interested in a farmout.

Click Policy Perspective 10036 Pemex Farmout Strategy – International Expectations to download the screen edition.

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Written by

Mexico Energy Intelligence

Baker & Associates offers niche-market business and policy intelligence related to Mexico's oil and gas, power and chemical industries. Over 1,000 reports have been issued in the last 20 years. Subject matter expert and publisher George Baker, who directs the firm, has carried out consulting assignments starting in the late 1970s at the height of the Oil Boom in Mexico. He brings bilingual and bicultural skill-sets to understanding and responding to challenges of business and public policy, coupled with a deep familiarity with the history and idiosyncrasies of the Mexican operating environment.