Pemex Executive Sees Success without Foreign Partnerships

Mexican oil giant Petroleos Mexicanos, or Pemex, would welcome a move by Mexico allowing it to enter partnerships with private companies, but such a reform isn't needed for the company to thrive, the company's director general said Friday in an interview with Dow Jones Newswires and the Wall Street Journal.

Partnering with large foreign companies like Exxon Mobil Corp. and Chevron Corp. "would be great" in permitting Pemex to drill more wells and advance projects more quickly, said Juan Jose Suarez Coppel, director general of Pemex.

But such a shift wasn't essential to the company's profitability, Mr. Suarez Coppel said. "There's still plenty we can do," he said.

Mr. Suarez Coppel laid out Pemex's case only weeks after the Mexican presidential election. During the presidential campaign, President-elect Enrique Pena Nieto supported ending Pemex's monopoly on oil exploration and production. Such a shift would require a change in Mexico's constitution.

Mr. Suarez Coppel urged the new administration to take steps to enhance accountability within the company's leadership. He said the new presidential administration should appoint a Pemex president, give the president a clear mandate, establish an empowered board of directors and let the company function free from political interference.

"We have too many cooks in this kitchen," he said. "It's very hard to have an agile, focused, driven company with a framework like that."

Mr. Suarez Coppel offered a muscular defense of Pemex's performance, taking issue with the perception that Pemex is a company in "crisis." He pointed to Pemex's activity and success with deep-water exploration and said the company was on track to turn around its production performance.

Pemex last year pumped 2.55 million barrels a day of oil and an additional 150,000 barrels a day of petroleum liquids, Mr. Suarez Coppel said. That's well below the 3.4 million barrels a day the company notched in 2004, Mr. Suarez Coppel acknowledged. Yet the company has managed to limit the erosion of production to a decline of less than 1% in the current year. Pemex aims to reach 3 million barrels a day around 2017, he added.

Copyright (c) 2013 Dow Jones & Company, Inc.

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