Alberto de la Fuente
President and Director General
Shell México
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Insight

Awaiting the Crown Jewel

Wed, 01/20/2016 - 16:07

Shell is looking to develop a diversified upstream portfolio in Mexico, and to this end, the IOC bought the data pack and pre-qualified for R1-L02, but has yet to move forward with a bid because it has not found the materiality needed to invest, as reported by Alberto de la Fuente, Director General of Shell Mexico. “We did not participate in the third mature onshore field bid phase, as it was never one of our considerations, but we will look into the unconventional resources phase and we are definitely interested in deepwater,” he explains. Shell is currently actively participating in the bidding round preparations for the deepwater phase and has moved to the prequalification phase. “In addition, we continuously evaluate opportunities along the entire value chain. The oil prices have not changed our interest in Mexico,” de la Fuente reassures. In addition to participating as operators on deepwater blocks, Shell is also interested in farm-outs in the deepwater segment with PEMEX or private companies. “I do not think it is a choice between one or the other, but rather, they are different opportunities,” de la Fuente states. He discloses that Shell could be interesting in working with PEMEX on certain fields in the Perdido area because of the fact that these already have 2P reserves. “This means less uncertainty and faster development than the fields awarded through Round One. We believe that three to four years could be gained, but this is not to say that the Round One blocks would not prove interesting and fruitful.” He goes on to clarify that, although both options could be part of most company’s strategy when entering Mexico, timing must also be considered. Indeed, if a company has a limited budget that only allows it to select one of the options, then farm-outs and licensing rounds will compete with each other.

De la Fuente has no preference between partnering with the NOC or with private companies. “Shell has experience across the globe, to the extent that it is unlikely that there is a single company that we have not either partnered or competed with. We are interested in partnering with PEMEX, and in fact I believe we are the only IOC to date to already have a partnership with the NOC, in Deer Park Refinery, Texas,” he points out.