Canada's Renaissance Oil Eyes Onshore Joint Venture With Pemex

  • Renaissance won rights to develop 3 Mexico fields in December
  • Pemex is seeking partners to boost declining oil output

Renaissance Oil Corp, the first Canadian company to win a private oil auction in Mexico, is looking to partner with state-owned Petroleos Mexicanos in its efforts to reverse an 11-year decline in the nation’s oil production.

Renaissance Oil, the British Columbia-based onshore producer, is “making great strides” toward cementing an agreement with Pemex to jointly develop mature onshore fields, Craig Steinke, the company’s chief executive officer, said yesterday in a phone interview from Mexico City. 

Pemex is seeking upstream partnerships, or farm-outs, this year to improve output in mature fields and areas where the company lacks the ability or capital to maximize production, Rodolfo Campos, the company’s treasurer, said in a Dec. 23 phone interview. Pemex’s oil production has fallen more than 1.1 million daily barrels since 2004.

“Pemex has a lot of very interesting, very prolific conventional opportunities that it needs joint-venture partners to help to develop,” Steinke said. “That’s an area where Renaissance intends on participating.”

Renaissance won rights in Mexico’s Dec. 15 oil auction to develop three onshore fields in the southern Chiapas state that contain an estimated daily production of 650 barrels of medium to light oil and natural gas liquids, according to the company. December’s auction was the third event held by the country, resulting in 25 contracts being awarded to the 40 companies that participated, including explorers from Mexico, Canada, the U.S. and the Netherlands.

Renaissance, which was co-founded by Goldcorp Inc. Chairman Ian Telfer, considers Mexico as “one of the top three places in world to be exploring for oil and gas,” Steinke said.

“Mexico has a world-class hydrocarbon resource base and they haven’t even scratched the surface on the unconventional side,” Steinke said. “It’s been underdeveloped over the last 80 years as a result of nationalizing the industry. It’s a fantastic opportunity for us.”

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