Steven Otillar Quoted by Bloomberg News on Pemex Gulf Venture
Akin Gump oil and gas partner Steven Otillar was quoted in the Bloomberg News article “Pemex Slow to Lure Oil Majors to Join Its Big Gulf Venture” discussing an upcoming auction by the Mexican national oil company Pemex to help it tap into the Perdido reserves in the Gulf of Mexico.
The article reports that the interest in participating with Pemex in the joint operating agreement (JOA) drafted by the Mexican government has been somewhat tepid. The winning bidders will partner with Pemex to develop an area estimated to contain as much as 485 million barrels of oil equivalent.
Otillar, who advises energy companies in Mexico, said the terms of the JOA proposed by Mexico would expose Pemex’s operating partners to greater risk than similar types of contracts usually do. There is, he said, “greater exposure for an operator, as opposed to non-operators, under this form of JOA than you might typically see in a deep-water development in another emerging market.”
While the article notes that Pemex has praised the joint venture as a means of reversing the company’s growing financial woes, Otillar said, “You might see parties that won’t participate in the early years of the reform until there is more case law and certainty” in the contractual details. He added, "that just means there will be opportunities for companies willing to take a more aggressive position.”