Mexico’s Pemex, Russia’s Lukoil sign cooperation agreement

Mexican stateowned oil company Petroleos Mexicanos and Russia’s Lukoil signed an agreement Friday to work jointly on exploration and production activities.

Pemex CEO Emilio Lozoya and Lukoil’s chief executive, Vagit Alekperov, signed the agreement in Davos, Switzerland, the Mexico Citybased company said in a statement.

The deal, which establishes that the companies will share experiences and knowledge pertaining to oil exploration and production, will enable Pemex to “bolster its operating and technological capacity,” the statement added.

It comes on the heels of a constitutional overhaul that will allow private companies to develop Mexico’s crude reserves for the first time since the late 1930s.

The statement provided no further details, but Mexican television cited Lozoya as saying Pemex expected the agreement to enable it to boost oil and gas production at mature fields.

Mexican authorities are counting on the energy overhaul, which still requires secondary implementing legislation, to enable increased production at mature fields and deepwater areas, as well as the development of difficulttoaccess shalegas reserves.

Supporters of the overhaul say the participation of major multinational energy companies under profit and productionsharing contracts and licenses is needed to boost sagging oil output.

Production has fallen by a quarter from a high of 3.3 million barrels per day in 2004 due to a sharp decline in output at offshore Cantarell, formerly Mexico’s most productive field, and a lack of investment.

The move to end Pemex’s monopoly, in place since the company was created in 1938 as part of thenPresident Lazaro Cardenas nationalization of the oil industry, is a thorny issue in Mexico because the stateowned firm has long been a symbol of national sovereignty.