Pemex To Evaluate the Appropriate Time to Continue with the Nobilis-Maximino Deep-Water Farmout Process

Since at this moment the conditions that could ensure a broader participation in the farmout bidding process for the Nobilis-Maximino deep water block are not favorable, Petróleos Mexicanos has decided to delay the bidding process while it evaluates the best moment to continue with this process, and will continue performing actions to reduce the risks inherent to the project.

This is due to the mainstream forecasts of crude oil prices in the medium and long term, which have been reported to range between 50 and 65 dollars per barrel, and which at this point in time have caused international oil companies to be very cautious before committing to complex projects that require large investments and where investment returns are expected to be long term. This is the case of the Nobilis-Maximino deep-water block, which requires an investment in excess of 10 billion dollars, and which is estimated to produce profits no earlier than 6 years after the project is launched.

While the costs for the development of deep-water projects have gone down internationally since 2014, specialized consulting firms estimate that the required oil balance price required for most deep-water developments remains higher than the forecast price. This has caused an important number of deep-water development projects to be deferred, while corporations wait for an improvement in financial conditions.

On the other hand, unlike the fields of the Trion block, the fields of the Nobilis-Maximino block have also shown an increased geological complexity, higher gas contents, and a flow depth of over 3 thousand meters, and therefore the balance price for this area is even greater.

The investment commitments recently acquired by the possible investors are yet another factor currently influencing the interest in new projects. This is the case of the important investments pledged to blocks in Brazil a few weeks ago by some of the companies that had access to the Nobilis-Maximino data room.

Pemex will continue to further its partnership strategy in various fields that present fewer technical challenges and risks, in accordance with its current Business Plan. In this regard, the company has begun the proceedings for the partnership migration of several commissions for exploration and extraction, which are grouped in seven clusters or farmouts located in the onshore portion of the southeastern basins.

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