Why Mexican offshore firms flock to Singapore for shipbuilding

Sembcorp alone scored 2 jack-up orders from Oro Negro.

Nomura cited a 30 January 2013 Upstream Online article, Emilio Lozoya Austin, a director of PEMEX, Mexico’s national oil company, as saying that the company is looking to acquire up to 12 modern independent leg cantilever jack-ups (JUs) and nine modular drilling units by 1Q15.

According to the article, Mr Lozoya Austin and other members of PEMEX senior management recently visited Keppel (Buy) and Sembcorp Marine (Buy) shipyards.

He also said that the new rigs will have a 20% local content requirement. 

Here's more from Nomura:

PEMEX produced 2.564mn barrels per day (bpd) of crude oil in December (down marginally from 2.577mn bpd in November) and is ranked one of the top-10 oil companies worldwide.

As Mexico’s national oil company, PEMEX has witnessed a crude production decline from a peak of 3.4mmbd in 2004. Under the new management, PEMEX is looking to ramp up production aggressively.

Mexico-based offshore players have recently stepped up activity and have been acquiring newbuilds. On 13 December 2012, Keppel secured an order for two JUs from PEMEX Exploracion y Produccion, a subsidiary of PEMEX.

This was preceded by Sembcorp Marine securing orders for two JUs from Integradora de Servicios Petroleros Oro Negro (Oro Negro) on 7 December 2012.

Oro Negro has also bought over two newbuild JUs ordered by Jasper Investments which were under construction at Keppel FELS.

According to Upstream Online, Mexico’s National Hydrocarbon Commission (CNH) has advised PEMEX to focus on shallow waters where it has proven expertise and can increase production profitably.

There are currently 31 JU rigs drilling in Mexico, out of which 22 rigs are more than 25 years are old. Only eight or 25% of the rigs are five years old or less, according to ODS-Petrodata reports.