India Inc line up for Mexican oil
Reliance, OVL, Indian Oil, GAIL rush as great game starts.india Updated: Apr 06, 2006 02:37 IST
Top private and state-owned oil companies have lined up for the oil equity pie; exploration and development of oil and gas fields in Mexico.
Reliance, ONGC Videsh, Indian Oil and GAIL are among these top companies that will explore the possibility of entering the hydrocarbon sector in Mexico. Sources say that as a first step, the oil and gas companies seeking footprint in Mexico would sign cooperation agreements with the Mexican state-owned energy major Pemex to jointly explore and develop oil as well as gas fields.
Reliance Industries Ltd and Pemex have signed a pact that provides for joint exploration and sharing know-how.
Pemex and Reliance will initiate joint exploration in the second-largest Mexican oil field Chiconotopack that has 40 per cent of Mexican gulf’s oil reserves. Total oil reserves of Mexico have been reported to be a staggering 10.2 to 22.4 billion barrels while the gas available is 39.5 to 59.2 trillion cubic feet. Indian government officials are working overtime to get the Indian companies’ participation in Mexican hydrocarbon sector, both shallow and deep-sea exploration. To begin with, most of these companies will bid for multi-service contracts to supply oil and gas, beginning later this month.
The officials of Petroleum and External Affairs Ministries are in touch with top brass in Mexico including Rafael Alexandri Rionda, Director General, Exploration and Exploitation of Hydrocarbons and Carlos Morales, Director General of Exploration and Production at Pemex.
Apart from exploration and production, Mexico has offered Indian companies like ONGC Videsh, IOC and GAIL partnership to jointly extract methane hydrates as it does not have the wherewithal and the required know-how. In contrast, India is part of a larger group including US, Canada, Russia, Japan, Korea, France, Great Britain and Germany that have the capability to extract methane hydrates.
While foreign equity participation with management control is not allowed in Mexico, the current dispensation is apparently inclined to change the investment norms, the Indian government has been assured. Mexico is keen that India should participate in its hydrocarbon sector in a big way as the revenues from its biggest oil field Cantarell have begun to decline by six to eight per cent annually. While US has the largest interest in Mexican energy sector, Pemex owns five per cent in Repsol of Spain. It also has contracts with French oil companies as in the case of Reliance.
Another major area being looked at by Indian oil companies in Mexico is the LNG blocks that are open for ownership and exploration by private companies. On reciprocity, Mexico is “willing to be a reliable supplier” of crude to meet Indian domestic demands.
Sources say that a broader hydrocarbon agreement between India and Mexico might be in the offing shortly.
Petroleum Ministry has asked the top bosses of all the oil companies including Subir Raha (ONGC), S.Behuria (Indian Oil), Prashanto Banerjee (GAIL), M.B.Lal (Hindustan Petroleum), R.K.Datta (OIL), Mukesh Rohtagi (EIL) and R.S.Butola (ONGC Videsh) to indicate their areas of interest in Mexican hydrocarbon sector.
First Published: Apr 06, 2006 02:37 IST