China’s Sinopec is the first integrated oil company to test the waters in Mexico after Congress passed an energy reform last fall.
‘Sinopec is competing for two large drilling contracts in Mexico’s Chicontepec basin, according to documents on Compranet, Mexico’s government procurement website. The other Chicontepec bidders are all foreign or local oil service companies, including industry giants Schlumberger and Halliburton. Even if Sinopec loses the upcoming tenders, the Chinese heavyweight appears to be taking a long-term approach in Mexico, said a Dow Jones Newswire report. Next week, Sinopec executives will give a presentation to state-run Pemex on the company’s land and offshore drilling equipment, said an industry executive familiar with the meeting. Sinopec has expanded internationally in recent years, buying oil assets in places like Africa, South America and Russia to lock in oil supplies for its massive Chinese refining network. In Mexico, China’s second largest oil company is hunting for cash, not crude. By law, Pemex has a monopoly on Mexican oil sales, and can only hire oil companies to work as service contractors. The reform gives Pemex new freedoms, such as offering incentives to contractors who finish work ahead of time, but does not allow Pemex to sell equity stakes in oil projects.