CEESP: Deepwater Crude Exploration JVs Needed

Noxal 1 Discovery
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Mexico needs to allow foreign firms to create strategic joint ventures with state oil company Pemex for deepwater crude oil exploration, the country's center for economic studies of the private sector (CEESP) said in a report.

Although the center recognizes the government's success as evidenced by Pemex's US$5bn a year investment in deepwater crude oil exploration and the Noxal 1 discovery, its analysts consider the current investment scheme for this kind of crude oil E&P insufficient in the long term.

The think tank has said the state company is managed according to political criteria, while other large international oil companies, including state-owned firms like Brazil's Petrobras (NYSE: PBR) or Norway's Statoil (NYSE: STO), are managed to maximize their long-term production.

CEESP predicts that Pemex will face development and competitiveness problems in the short term if it is not given autonomous corporate governance.

Last week Mexico's President Vicente Fox announced the discovery of Noxal 1, a new deepwater oilfield in the Gulf of Mexico that could contain 10 billion barrels of crude about 100km from Coatzacoalcos port on the coast of Veracruz state.

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