Mexico seeks access to Cuban oil via Repsol
By Israel Rodríguez J.
From the Mexican newspaper La Jornada
The director of Pemex/PEP [Mexican Petroleum Exploration and Production], Carlos Morales Gil, said that, to avoid running into the Helms-Burton Law, Pemex might participate with the Spanish company Repsol in the joint exploration and exploitation of oil on the island. That 1996 U.S. law prohibits companies and individuals doing business with Cuba.
The Mexican state oil company holds almost 10 percent of the shares in the Spanish firm. Repsol has an Argentine subsidiary –YPF– that was partially nationalized by the government of President Cristina Fernandez.
In an interview, Morales Gil explained that now that a letter of intent was signed recently with Unión Cuba Petróleo (Cupet), Pemex will review the information available on a few deposits not yet exploited and some already allocated, where other companies are working.
On April 12, President Felipe Calderón announced in Havana that Pemex and Cupet had signed a nonbinding letter of intent, by which both sides will explore options for Pemex to begin exploration and exploitation of crude oil in the Cuban portion of the Gulf of Mexico, the border between the two countries.
Mexico’s Department of Energy (SENER) explained that PEP and Cupet will analyze alternatives. A road map has been established, including a joint workshop in Havana in the near future.
Morales Gil said that there are two possibilities to participate in Cuba: one through the areas where no other company is working, to see if they are attractive, something that “we will determine after we review the information, and the other with firms that are already working, to see if the data they have are attractive and if we’re likely to enter into a partnership.”
Would that be done through Repsol, so as not to run into the Helms-Burton Law? Morales was asked.
“It’s an option. Repsol is already drilling a well there,” he answered.
It should be noted that, since January this year, the oil rig leased by Repsol has been drilling in Cuban waters in the Gulf of Mexico. By 2013 there will be five exploration wells in Repsol’s exclusive economic zone (EEZ) in the Gulf of Mexico, where 27 areas have been granted in concession and 37 remain available.
The director of PEP, Pemex’s most important subsidiary, said that despite Argentina’s partial nationalization of YPF, there remains a possibility for Pemex to again venture into that country.
He pointed out that Pemex has already worked in Argentina (1991-97) through a company that no longer exists called Mexpetrol, formed by Pemex, the Mexican Petroleum Institute, Bancomext, ICA and Protexa.
During the initial phase of business promotion, Mexpetrol was invited to participate in the development of hydrocarbons in Argentina, for which in 1991 it formed a team with YPF, which at the time was state-run. This working group selected the area called “The Buta Ranquil Gate,” located in the provinces of Neuquén and Mendoza in the foothills of the Andes, southwest of Buenos Aires.
“Pemex operated in Argentina for some years, but working with the industrial agreement that was signed with Repsol involves options both in the U.S., Cuba and others around the world,” Morales Gil said. “We are partners with Repsol and will try to make [the partnership] both productive and profitable.”
Speaking about other ways to internationalize Pemex’s operations, he said: “We are analyzing the options in the U.S. side of the Gulf of Mexico.” He noted that participation on the U.S. side could also be through companies like Repsol, Shell, Chevron or [Brazil’s] Petrobras.
“We are looking at the possibility of [exploring] shale gas in the United States. There’s a lot of options, and we have also analyzed others in Africa. But we have to submit all that to Pemex’s Committee on Investment Strategies for possible adoption,” Morales Gil said.
