(Repeats to widen distribution)
By David Alire Garcia
MEXICO CITY May 17 BP Plc's first foray
into Mexico's recently opened energy market is proving more
promising than expected, and the government should offer more
big projects to lure investment, the British oil major's Mexico
boss said in an interview.
Chris Sladen, country manager for Mexico, said BP expects to
grow investment in everything from exploration to retail fuel
sales, and looks forward to partnering with state oil company
Pemex after losing an early chance for a lucrative
Mexico wants to attract major investors to reverse years of
declining crude output and rising dependence on U.S. natural gas
and fuel imports.
"To turn that ship around, you need a substantial number of
large projects," Sladen said at BP headquarters in Mexico City.
"I would encourage Mexico to offer substantial numbers of large
projects because that's what it takes."
BP and others are growing their presence in Mexico after a
2013 energy overhaul ended Pemex's decades-long monopoly.
The British firm is already involved in three offshore
projects, two in the Gulf of Mexico's deep waters and another in
shallow waters. Sladen said initial company investment in all
three could total "many hundreds of millions of dollars."
That investment would grow significantly, he added, if the
projects are successful.
In 2015, Argentina-based Pan American Energy LLC,
which is 60 percent BP-owned, won the rights to develop the
Hokchi field in the Gulf's shallow waters.
Sladen said three of four committed exploration and
appraisal wells have already been drilled there, and early data
"The initial results have suggested that the reservoir
volume might be slightly higher than initially modeled. Perhaps
it's 20 percent higher," he said.
Late last year, BP partnered with Norway's Statoil
and France's Total SA to win development
rights for two deep water blocks in the southern Gulf of
Mexico's Salina basin.
Exploration plans for each of the blocks will be submitted
to regulators by September, Sladen said.
While each of the three companies in the consortium has a
one-third stake in both blocks, Statoil is the operator,
responsible for executing the developments.
BP has maintained a presence in Latin America's second
biggest economy dating back to the 1960s, and Sladen has been
country manager since 2007.
The company narrowly lost out in December to Australian
mining and oil giant BHP Billiton in its bid to partner with
Pemex on its Trion deep water project, but Sladen still expects
to tie-up with Mexico's former oil monopoly.
"I see a future of us co-investing with Pemex on major
projects," he said, without going into further detail.
BP is still evaluating a range of projects at oil auctions
scheduled for later this year, as well as possible investments
in ports or storage facilities needed to import fuel, he added.
The company has created hundreds of local jobs with hundreds
more likely in the near future as it cements its status as
Mexico's first-ever integrated international oil firm, he said.
Beyond the three offshore projects, BP has recently won
so-called open season rights to surplus capacity on some natural
gas pipelines owned by Pemex, Sladen noted.
The company also launched Mexico's first foreign branded gas
station, with plans to open some 1,500 stations over five years.
Sladen said that by the end of this year BP could open 200 gas
The first station that opened in March just outside Mexico
City has already become one of the country's top three retail
sellers by volume, he added.
(Reporting by David Alire Garcia; Editing by Dave Graham and