By Ana Isabel Martinez
MEXICO CITY, Dec 5 (Reuters) - Big oil companies operating
in Mexico have launched a drive to convince leftist President
Andres Manuel Lopez Obrador to resume auctions of oil and gas
contracts he has branded a failure in reviving the industry.
Chevron Corp, Exxon Mobil Corp and Royal
Dutch Shell Plc, among other firms in Mexico's
Association of Hydrocarbon Companies (Amexhi), say they have met
output targets and investment pledges worth hundreds of millions
of dollars in the initial phases of their contracts.
"We've been complying (with contractual obligations), and by
any metric you look at, we've been successful," Amexhi President
Alberto de la Fuente told reporters this week.
Now they want the government to restart the auctions
initiated under a 2013-2014 energy opening, including those to
select partners for state oil firm Petroleos Mexicanos (Pemex).
Lopez Obrador has strongly criticized the reform, which was
enacted under his predecessor and opened the door to over 100
exploration and production contracts for oil companies.
Having canceled auctions scheduled for 2019, he points out
the reform has failed to lift crude output to the previous
government's target of 3 million barrels per day (bpd).
Production is below 1.7 million bpd, the lowest in decades.
The government said it will not do more until seeing
"tangible" results, without specifying what that means.
The president also suspended auctions for the
heavily-indebted Pemex to seek private partnerships known as
"farmouts."
Amexhi argues output is a poor yardstick because only 29
contracts are in the production stage out of 111 awarded through
2018. The rest still need time to finish exploratory drilling
and studies before beginning commercial production, it says.
"What we need is to sit down with the energy ministry, with
the government and understand which metrics are important to
them," said de la Fuente, a former energy regulator who is now
Shell's country manager in Mexico.
Some voices within Lopez Obrador's administration are trying
to convince the president to resume auctions, two officials told
Reuters. The task is hard, they said, because he believes the
state should hold a prominent role in the sector.
Meanwhile, private and foreign oil firms have spent about
$11 billion in investment, taxes and payments to Pemex, and plan
to invest another $37 billion in the coming years, Amexhi says.
"We're looking to raise awareness in the government about
how imperative it is to resume tenders," said a director of a
foreign oil company in Mexico who requested anonymity.
"If not, it's going to be impossible for production to pick
up given the state Pemex is in and because the government is
racing against the clock to meet its own goals," he said.
Lopez Obrador has pledged to reverse more than a decade of
falling crude output at Pemex. The firm's exploration and
production budget has been crimped by its debt, the largest of
any oil company in the world.
Experts say it will be impossible for Pemex to reach its
output goal of 1.8 million bpd by the end of 2019 after October
closed with production at 1.66 million bpd.
In the private sector, Amexhi expects production to reach
nearly 50,000 bpd this year and jump to 280,000 bpd by 2024. But
it argues new auctions could produce even faster results.
Carlos Salazar, head of powerful Mexican business lobby CCE
that helped resolve a dispute between the government and several
energy infrastructure firms, said he supports Amexhi's efforts.
"Let's set the milestones so that everyone, the public
opinion, knows the objectives," he said.
(Reporting by Ana Isabel Martinez, Additional reporting by Dave
Graham
Editing by Marguerita Choy)
