Towards efficiency and profitabilityApril 27, 2018
Carlos Treviño Medina, general director of Pemex, talks to TOGY about what the NOC is concentrating on following the energy reform, how partnerships will contribute to its upstream success, the significance of open season tenders for midstream capacity and how the company works in line with international best practices. Pemex was founded in 1938 as Mexico’s state-run oil company.
On refocusing efforts: “In accordance with our business plan, we are concentrating efforts towards those areas of work that represent greater profitability and a more efficient use of our resources.”
On strength through partnerships: “We are strengthening our alliances with the world’s leading oil companies to increase our knowledge and maximise the benefits of the energy reform. Our aim is to ensure that the wealth of our subsoil transcends generations and remains a national asset of Mexico.”
Most TOGY interviews are published exclusively on our business intelligence platform, TOGYiN, but you can find the full interview with Carlos Treviño Medina below.
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On which areas is Pemex concentrating its efforts?
In accordance with our business plan, we are concentrating efforts towards those areas of work that represent greater profitability and a more efficient use of our resources.
At the same time, we are strengthening our alliances with the world’s leading oil companies to increase our knowledge and maximise the benefits of the energy reform. Our aim is to ensure that the wealth of our subsoil transcends generations and remains a national asset of Mexico.
How will partnerships help Pemex expand its E&P activities?
We are moving forward determinedly to establish partnerships that will allow us to boost exploration and production.
Petróleos Mexicanos [Pemex] recently signed contracts for the extraction of hydrocarbons in the Cárdenas-Mora and Ogarrio fields, located in the states of Tabasco and Veracruz in southern Mexico, with companies Petrolera Cárdenas Mora (Cheiron Holdings) and Deutsche Erdoel Mexico [DEA].
The terrestrial Cárdenas-Mora and Ogarrio farm-outs generated income for Pemex of around USD 540 million, and it is foreseen that they will attract investments worth more than USD 1.5 billion.
These projects are in addition to the eight partnerships that were made in previous rounds and farm-outs.
Strategic alliances allow us to spread risk and increase the profitability of the company. The future of Petróleos Mexicanos and other energy companies around the world lies in strategic partnerships.
How is Pemex going about finding partners to increase its operational and financial capabilities?
We are always looking for ways to establish strategic partnerships with the largest players in the sector worldwide to meet our goal of giving balance and profitability to the finances of the state productive enterprise.
Earlier in 2018, we participated in the 37th CERAWeek Forum, which brings top players together in Houston, Texas to share experiences and learn about the best practices being used around the world.
We had very interesting meetings with the CEOs of the main oil companies, such as BP, Chevron, Ecopetrol, BHP, DEA and Statoil, among others, with contributions from the Middle East and Latin American companies, too. With hard work and entrepreneurial spirit, we are trying to position Pemex as a leading North American producer. We met with top representatives of the oil and gas industry to get their advice, which gave us an idea of the different scenarios that we need to incorporate into our business plan and how to move forward in future.
All these experiences have helped us to find opportunities and form partnerships that allow us to be more efficient, productive and profitable.
How will the Pemex open seasons for excess fuel transportation and storage capacity contribute to a strengthening of Mexico’s logistics sector?
The result was very encouraging for the energy sector. The fact that a world-class company such as Tesoro [now Andeavor] participated and won demonstrates the confidence that exists in our country, particularly following the implementation of the energy reform, promoted by President Enrique Peña Nieto. These procedures lay the foundations for open and non-discriminatory access to Pemex’s pipeline and storage transportation infrastructure.
Our country needs much more investment in logistics. Pemex assets must be the base of the logistics infrastructure, and while the open seasons are a mechanism for the entry of new players, further logistics investments are key to satisfy the logistical needs of our country.
What is the NOC doing to attract international private capital to further develop its assets?
Finance is another area where we have been active in big capital markets to make the world aware of the transformation that Pemex is experiencing and the great areas of opportunity that have been opened since the energy reform.
We were recently in New York with the Secretary of Finance and Public Credit, José Antonio González Anaya, to meet with the most important banks in the US and with the president of the New York Federal Reserve to talk about how we are prioritising the stability and profitability of our finances. We advertise the advantages of the company to attract more investments through strategic partnerships from which all will benefit, most of all Pemex.
What policies does Pemex implement to manage risk in its oil and gas activities?
In Pemex, we act in harmony with international best practices in terms of industrial safety and environmental protection. It is part of our responsibility as a company to be respectful to local communities, as well as to protect our greatest asset, namely our colleagues.
Furthermore, in all business areas, we have committed to complying with the highest industrial standards of operation, security, ethics and first-level anti-corruption practices.
What objectives is Pemex pursuing in 2018-2019?
The energy reform implies a profound transformation of the legal and institutional framework of the Mexican energy sector, which seeks to promote the sustainable and efficient use of our natural resources to reach the sector’s full potential and contribute to the country’s development.
The Five-Year Tender Plan for the Exploration and Extraction of Hydrocarbons 2015-2019 was developed with this in mind. It is a document that provides a legal basis for the issue of tenders to be held over the coming five years.
As such, Pemex will participate, as it has been doing, in Round 3 of the tenders with the aim of increasing its profitability and making its operations more efficient in business areas that offer us better growth prospects.
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