Mexico's Pemex, Billionaire Slim Renegotiate Deepwater Gas Project

Mexico's state-owned oil company, Petróleos Mexicanos (Pemex), and billionaire Carlos Slim's companies have renegotiated a deal to develop the Lakach deepwater gas field in the Gulf of Mexico. The revised agreement, announced on February 1, 2025, aims to make the project more economically viable and attractive to private investors. Here's a closer look at the key terms and conditions of the renegotiated deal and the strategic motivations behind Slim's increased investment in the energy sector.



Key Terms and Conditions of the Renegotiated Deal

1. Pemex Ownership and Control: Pemex will retain ownership of the field and its reserves, while Grupo Carso, Slim's main company, will build an inland facility to store and process the gas and condensates. This change from the original deal, where ownership and control were more ambiguous, ensures that Pemex maintains its stake in the project.
2. Partnership with Talos Energy and FCC: Carso will team with Houston-based Talos Energy Inc. and a local unit of Spain’s Fomento de Construcciones y Contratas SA (FCC) to develop Lakach. Slim owns stakes in both companies, which was not the case in the original deal. This partnership brings valuable technical expertise, financial resources, and political influence to the project.
3. Investment and Development Timeline: Grupo Carso will invest $1.2 billion to develop the field, with production expected to start around 2026. This significant investment, compared to the original deal that was scrapped due to high costs, demonstrates Slim's commitment to the project's success.
4. Service Contract: Pemex wants to develop the offshore field using a service contract where partners finance projects upfront, a mechanism used prior to the country's energy sector liberalization. This departure from the original deal aims to make the project more attractive to private investors.
5. Addition of Nearby Fields: Grupo Carso wants to add two nearby fields, Piklis and Kunah, to increase the potential profitability of the venture. This addition, not part of the original deal, could enhance the project's economic viability and attractiveness to investors.

Strategic Motivations Behind Slim's Increased Investment in the Energy Sector

Carlos Slim's increased investment in the energy sector, particularly in the Lakach project, aligns with his overall business portfolio and long-term objectives. Some key strategic motivations behind his investment include:

1. Diversification and Risk Mitigation: Slim's primary fortune comes from telecommunications through America Movil SAB. By investing in the energy sector, he is diversifying his portfolio and mitigating risks associated with a single industry.
2. Growing Demand for Energy: Slim recognizes the growing demand for energy, both domestically and internationally. In an event in Mexico, he stated, "Mexico needed to invest in energy so it can take advantage of trade tensions between China and the U.S. and pull in more investment." (Bloomberg, 2025-02-01)
3. Potential for High Returns: The energy sector, particularly the Lakach project, offers potential for high returns. The Lakach field is expected to produce gas around 2026, with an estimated 900 billion cubic feet of gas reserves. Slim's investment of $1.2 billion in the project is expected to yield significant profits in the long run.
4. Partnerships and Collaborations: Slim's investment in the Lakach project allows him to collaborate with other prominent players in the energy sector, such as Talos Energy Inc. and a local unit of Spain's Fomento de Construcciones y Contratas SA. These partnerships can provide Slim's companies with valuable expertise and experience in the energy sector.
5. Long-term Objectives: Slim's investment in the energy sector aligns with his long-term objectives of expanding his business empire and increasing his wealth. By investing in the energy sector, he is positioning himself to benefit from the growing demand for energy and the potential for high returns.

In conclusion, the renegotiated agreement between Pemex and Carlos Slim's companies for the development of the Lakach deepwater gas field reflects a more collaborative approach between Pemex and private enterprise, with Slim's companies playing a significant role in the development and financing of the project. The renegotiated agreement aims to make the project more economically viable and attractive to private investors. Carlos Slim's increased investment in the energy sector, particularly in the Lakach project, is driven by strategic motivations such as diversification, risk mitigation, growing demand for energy, potential for high returns, partnerships, and long-term objectives. These motivations align with his overall business portfolio and long-term goals of expanding his empire and increasing his wealth.