Mexico's Carlos Slim: 'Complicated' deepwater project being evaluated

Mexican billionaire Carlos Slim announced on Monday that he and his team are re-evaluating the deal they signed with Pemex, Mexico's state oil company to develop Mexico’s first deepwater gas field. The project has been plagued by issues over its commercial viability for years.

The comments are in line with an exclusive published last month, which revealed that representatives from Grupo Carso of Slim and Pemex had discussed changes to the agreement to make the Lakach Project profitable despite lower gas prices forecast.

Slim, during a Mexico City press conference, said that it was a complex project that needed to be handled by highly skilled technicians. He also noted that the Gulf of Mexico's depth made the task more difficult.

When asked whether he still had interest in the field, he repeatedly replied "It depends on what's being built."

Pemex has abandoned the Lakach Project twice due to prohibitive costs.

Slim also stressed the need to invest more in infrastructure, and said that Mexico imports the vast majority its gas from the United States.

Reports stated that Grupo Carso was looking to expand the business by adding two fields near the existing one, Piklis, with resources similar to those expected. They were even considering putting the project in limbo.

Slim has increased his energy investments over the past few years. He now holds stakes in Zama, Ichalkil, and Pokoch, all shallow-water fields. His team met Pemex officials last year to discuss Lakach.

Lakach, located 90 kilometers (56miles) from Veracruz Gulf Port, is estimated to hold 900 billion cubic foot of gas. The existing well is under low pressure, which makes production difficult.

Sources said it needed more investment and that the low gas prices made things more difficult. (Reporting and editing by Margueritachoy.)

(source: Reuters)