MEXICO CITY—Mexican conglomerate Alfa SA B said Thursday it has reached an agreement to form a joint venture with Canada-basedPacific Rubiales Energy Corp. to bid in Mexico’s first round of oil and gas blocks and pursue other energy projects in the country.
The planned joint venture, in which each partner will hold a 50% stake, will study bidding in the opening round of blocks that the Mexican government is expected to begin tendering early next year.
It will also consider acquiring service contracts with a view to migrating them to exploration-and-production contracts, and developing other energy-related businesses including midstream projects, Monterrey-based Alfa said in a press release. Midstream activities include transportation, pipelines and wholesale marketing of petroleum products.
Alfa has close to a 20% stake in Pacific Rubiales, which has exploration and production operations in Colombia, Peru and other Latin American countries, and has expressed its intention of participating in the opening of Mexico’s oil sector.
“This agreement is in line with our strategy to actively participate in the Mexican oil and gas industry, contributing to raise the competitiveness of its industrial sector by increasing the availability of energy resources,” said Alfa, which has petrochemicals, auto parts, food and telecommunications businesses, in addition to shale oil and gas production in Texas. “We see a great opportunity for our two companies to have a strong position in the Mexican market.”
Alfa shareholders recently approved a plan for the company to raise up to $1.2 billion for energy projects through the sale of new stock. Pacific Rubiales has said it has $1 billion earmarked for Mexico projects.
The changes in Mexico’s energy laws, including constitutional amendments to end state oil company Petróleos Mexicanos’s 76-year monopoly on the industry, is seen as the cornerstone of the structural changes that the administration of President Enrique Peña Nieto passed in its first two years.
The first bidding round includes a broad range of projects, such as mature oil fields, nonconventional reserves like shale oil and gas, deep-water drilling in the Gulf of Mexico, and shallow water projects.
Pemex, which was assigned around four-fifths of Mexico’s proven and probable reserves ahead of the bidding, also plans to farm out some existing projects. Existing service contracts can also be switched to exploration and production contracts.
Alfa is among the Mexican companies with experience in the energy field that are expected to benefit from the opening of the oil sector, as private and foreign companies are allowed to explore for and produce oil for the first time since the 1938 oil nationalization.
Grupo Carso , the industrial and retail conglomerate controlled by billionaire Carlos Slim , recently reorganized its energy-related assets into a separate unit with drilling, exploration and production, leasing of rigs, and renewable electricity assets.
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