Toronto-based Pacific Rubiales Energy and Mexico’s Alfa S.A.B. de C.V (ALFA) entered into an agreement to create a 50:50 joint venture for the development of business in Mexico.
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Pantin. From Pacific Rubiales. |
The JV will focus on the study of, and the bidding on assets in Mexico’s initial oil and gas bid round; acquiring service contracts to transfer them to exploration and production contracts; the development of petroleum and natural gas assets in Mexico; and the development of any business ancillary to the petroleum business in Mexico, including midstream projects.
Pacific Rubiales says that under the terms of the agreement, the two companies will jointly identify, discuss, evaluate and undertake the joint venture prior to the first bid round. In addition, the JV remains subject to any applicable regulatory approvals and the determination of the joint venture structure pursuant to a definitive agreement.
"This joint venture represents a significant milestone for the company as we enter into the Mexican oil and gas industry with a world class partner,” says Ronald Pantin, Pacific Rubiales CEO. “We intend to be active in the first open bidding rounds expected next year and anticipate that Mexico will provide another significant platform of future growth, for the company."
Pacific Rubiales also released its forecast for 2015, in which the company says it is expecting to spend about US$1.45 to $1.55 billion to fully fund its planned capital expenditures program.
According to the company, its full year production for 2015 is expected to be between 155-160MMboe/d, generating EBITDA of approximately $1.9 to $2.1 billion, assuming a WTI oil price average of $70 a barrel.
"In an environment of lower oil prices, our 2015 capital expenditures program is focused on near-term, high-margin volumes. When setting the company's 2015 outlook and guidance targets, we have chosen to be both cautious and prudent in an uncertain environment, maintaining flexibility, assuming a lower oil price, and adjusting capital to match internally generated cash flow,” says Pantin. “Although we believe that lower prices will be relatively short-lived, we will be closely monitoring the external environment and have the flexibility to adjust to lower or higher prices accordingly.
In October, Pacific Rubiales entered into a three-year memorandum of understanding with Mexico's state oil firm Pemex to establish the basis for discussions and analysis of potential oil and gas cooperation in Mexico, including exploration, deepwater projects, revitalization of mature fields, heavy and extra-heavy oil onshore and offshore fields, high water production fields and other upstream activities. Additionally, it creates a cooperative framework for exchanging technical knowledge, information, experiences and practices, as well as any other mutually identified areas of interest.
Mexican president Enrique Pena Nieto approved the country's historic energy reform in August, overhauling Mexico’s energy and electricity industries and opening them up to private investment for the first time in decades. In the months following, Pemex went into a MOU-signing spree with several companies including Eni, Chevron, Petronas, and ExxonMobil. Mexico’s newly-fortified regulator, the National Hydrocarbons Commission, will conduct its first-ever bid round, Round One, in 2015.
Read more:
Pemex, Pacific Rubiales team up
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