Mexico's president appoints new director of Pemex

Mexico’s President Felipe Calderon appointed Juan Jose Suarez Coppel as the new director of state-owned Petroleos Mexicanos (Pemex), replacing Jesus Reyes Heroles as part of a broader cabinet reshuffle.

Sep 8th, 2009

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Sept. 8 -- Mexico’s President Felipe Calderon appointed Juan Jose Suarez Coppel as the new director of state-owned Petroleos Mexicanos (Pemex), replacing Jesus Reyes Heroles as part of a broader cabinet reshuffle.

Suarez Coppel “will have to accelerate the exploration and exploitation of new gas and crude reserves,” said Calderon. “Among his main responsibilities will be to carry out the reforms approved for Pemex so that the company can be thoroughly transformed and strengthened.”

In a televised address, Suarez Coppel said, “I take on this responsibility with a realistic vision of the difficult situation the company is going through.” He said, “Pemex is currently behind other oil companies in a wide range of efficiency indicators.”

Analyst IHS Global Insight viewed the appointment of Suarez Coppel, who served as director of finance for Pemex until 2006, as largely cosmetic, saying that without more fundamental structural reform it is “unlikely” that the appointment of a new head of Pemex will make much difference.

“Instead, Pemex is likely to continue to struggle to meet its production target for this year, while the longer term supply outlook remains uncertain without a greater opening to private investment,” IHS Global Insight said.

In New Orleans, analysts at Pritchard Capital Partners LLC said, “This follows reports late last week that Mexico’s Energy Minister Georgina Kessel said that the country would have to reevaluate the strategy for Chicontepec moving forward given production shortfalls. The reports indicated that Chicontepec will produce 60,000 b/d by the end of this year vs. a previous forecast of 72,000 b/d. The delays from Pemex were widely expected and concerning in the short-term for oil service firms with exposure to Mexico due to potential penalties or delayed revenues. However, the long-term implications may incentivize the country to more aggressively expand efforts and thus potentially present a greater role for Western oil service firms.”

Last month Kessel said Pemex will average 2.5 million b/d in 2010, down 4% from levels in this year’s first half (OGJ Online, Aug. 28, 2009).

The appointment of Suarez Coppel coincided with an announcement by Pemex that it awarded a survey contract to CGG Veritas Services de Mexico, the local subsidiary of French geophysical services provider CGG Veritas.

Under the contract, Pemex will pay CGG Veritas Services de Mexico $463.5 million to carry out 3D seismic mapping of a 75,000-sq-km area in the Gulf of Mexico to determine the country’s deepwater reserves.

Contact Eric Watkins at hippalus@yahoo.com.

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