Chevron joins with Pemex and Japanese firm in bid for offshore rights

Chevron Corp. has joined forces with Petroleos Mexicanos and Japan’s Inpex Corp. to bid next week for the right to explore for oil and natural gas, the first time the state-owned operator will partner with private companies to develop crude in the Gulf of Mexico.

Seven groups and eight individual bidders have been qualified to participate in the Dec. 5 auctions that include the Trion field joint-venture with Pemex and other 10 deepwater blocks, Mexico’s National Hydrocarbons Commission announced in Mexico City on Monday. The regulator didn’t specify which bids were for the joint venture or for the other areas.

Total SA has joined forces with BP Plc and Norway’s Statoil in one group, and with Exxon Mobil Corp. in another. Eni SpA and Lukoil have also joined up, and Anadarko Petroleum Corp. and Royal Dutch Shell Plc formed another group.

The Mexican government made a series of adjustments to sweeten the terms of the Joint Operating Agreement that Petroleos Mexicanos will sign with potential partners to develop the Trion field. Landing a major producer as a partner will signal the beginning of a new era for Mexico’s reeling oil giant. Burdened with nearly $100 billion in financial debt and a 12-year slump in crude output, Pemex has pointed to partnerships as the road to its salvation since the government ended the company’s 76-year production monopoly in 2014.

“We think the offer and opportunity are good enough for Trion to be awarded,” Pablo Medina, an oil and energy analyst at Wood Mackenzie, said in a phone interview. “The key to Trion being awarded was the willingness to change the JOA and the conditions of the contract. Becoming Pemex’s first partner could create goodwill down the road as the industry continues to open.”

Mexican upstart Sierra Oil & Gas, which has backing from private equity firms Riverstone Holdings and BlackRock Inc, and Malaysia’s Petroliam Nasional Bhd, or Petronas, have joined forces in one group as well as another that includes Murphy Oil Corp. and Ophir Energy Plc. BHP Billiton Ltd and China’s CNOOC Ltd will participate individually.

“Many of the companies that are participating in this bidding have been in Mexico with a permanent office in Mexico for decades waiting for this moment,” Juan Carlos Zepeda, National Hydrocarbons Commissioner, said in a Nov. 22 interview in Mexico City. “We have very serious players and there is great expectation.”

SHOW MORE