CNH approves Pemex Lakach gas project in deep waters

The National Hydrocarbons Commission (CNH) approved the state-owned Pemex a modified plan to develop a natural gas project in deep water for the Lakach field.

Regulatory body officials had questioned whether Pemex could take on the complex project, the cost of which has been re-estimated at nearly $1.8 billion.

Lakach, in the Gulf of Mexicohas some 937 billion cubic feet of reserves, but rising costs have hampered development for several years.

In July, Pemex announced the reactivation of the project together with the US liquefied gas company New Fortress Energy.

President Andres Manuel Lopez Obrador he has sought to defend state-owned companies and keep private investors on the sidelines, an agenda complicated by Pemex’s lack of capital and huge debts.

PetrĂ³leos Mexicanos proposed to develop Lakach with New Fortress Energy using a service contract, a formula used before the opening of the sector energetic of the country in 2013-14. Under a service contract, Pemex would retain full ownership but take the risk if prices fall.

With information from Reuters

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