Mexico's state-owned Petroleos Mexicanos, or Pemex, brokered a deal in November that's seen as likely to have eased an 18-month deadlock over Repsol's demand for $10 billion compensation over the Argentine government's seizure of YPF, the Argentine oil and gas company majority owned by Repsol.
The talks led to a deal seen as likely to halve the compensation claim and settle the issue with $5 billion in Argentine bonds. Repsol isn't keen on the compromise and is seeking professional help to work out details of the compensation package.
Argentina has hired international experts to help resolve the dispute, which soured Buenos Aires' ties with Madrid and upset European Union leaders enough to put the Latin American country's EU trade at risk.
As a compensation deal takes shape, Pemex is moving to forge its own partnership with YPF that will give the Mexican energy major a say in YPF's future exploration and investment plans, Tiempo Argentino financial newspaper reported.
Pemex wants a role in developing Argentina's Vaca Muerta shale oil deposits in Patagonian Neuquen and has already sent a team of experts to Argentina to explore prospects.
The Pemex move is significant, analysts said, because the Mexican state oil industry is looking into developing Mexico's own shale oil as well as deepsea hydrocarbon resources in the Gulf of Mexico.
Both areas are underexploited by Pemex, mainly because of lack of cash resources, but a partnership in Vaca Muerta may open up new prospects for cash investment and other international partnerships, analysts said.
Mexico is debating how to go about attracting foreign investors into its own state-run energy sector, which has tough rules restricting foreign participation. Analysts said constitutional changes would be required to change rules prohibiting foreign participation in Mexican oil industry.
Pemex board member Fluvio Ruiz Alarcon told Tiempo Argentino the company was "on track for a formal agreement" with YPF on a future partnership. Pemex is a minority shareholder in Repsol and has emphasized its neutrality in the Repsol-YPF talks by criticizing Repsol's management style and its position on the compensation deal with Argentina.
Pemex executives have said Mexico's oil industry can only develop through foreign investment, prohibited since it nationalized its own oil industry in 1938. Experts in the industry say Mexico needs to more than double its spending on exploration for new oil, both deep sea deposits in the Gulf of Mexico and onshore shale oil reserves.
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