Russian oil company eying Gulf of Mexico opportunities

Lukoil says it's looking at the chance to team up with the Mexican oil company Pemex for work in its territorial waters.
By Daniel J. Graeber  |  Nov. 13, 2017 at 8:31 AM
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Nov. 13 (UPI) -- Russian oil producer Lukoil said Monday it was vetting the possibility of teaming up with a Mexican company for work in the Gulf of Mexico.

Vagit Alekperov, the chief executive officer at Lukoil, said he was meeting with authorities at Petróleos Mexicanos, known also as Pemex, to discuss a potential partnership for offshore oil in North America. His announcement came after Washington enacted more sanctions on Russia, though the CEO said that was irrelevant.

"No, [sanctions] do not affect [this]," he was quoted as saying by Russian news agency Tass.

The U.S. Office of Foreign Assets Control in early November amended Russian sanctions with respect to the energy sector, blocking U.S. entities from helping with companies with "the potential" to produce oil in Russian territory or shale projects anywhere in the world. The amended list makes reference to projects "initiated on or after Jan. 29."

Russian Energy Minister Alexander Novak said the sanctions are nothing new, relate mostly to foreign projects where Russian companies have more than a 35 percent interest and deal only with new projects slated for a January start date. The Kremlin said the sanctions are part of U.S. efforts to push deeper into the European energy sector.

Lukoil already has a stake in licenses in the Gulf of Mexico and plans to take on more holdings with a minority share.

Talos Energy, working alongside joint venture partners Sierra Oil and Gas and Premier Oil, early this year confirmed a discovery at the Zama-1 exploration well off the coast of Mexico. Initial estimates put the reserve potential at between 1.4 billion and 2 billion barrels of oil, which exceeded early expectations.

The discovery followed similar claims made by Italian energy company Eni in March, which confirmed the potential for oil offshore Mexico in the first drilling campaign by a foreign company since 2013.

Mexican President Enrique Peña Nieto moved through reforms to draw private investors to the state energy sector after more than 70 years of a monopoly controlled by state-run Petroleos Mexicanos, or Pemex. The reforms could bring in up to $415 billion in investments over the next 20 years as the country establishes links to the rest of the world.

Mexico aims to produce around 3.5 million barrels per day by 2025.

Russia's move comes as the U.S. government aims to reconfigure the North American Free Trade Agreement with Mexico and Canada.

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