Pemex Wants Petrobras' Deepwater Magic

When you're drowning in debt, plagued by declining production, and running a refining business that seems chronically allergic to profits, buddying up with a more successful partner starts looking like a sound strategy.

That's essentially what just happened between Mexico's Pemex and Brazil's Petrobras.

The two state-controlled oil giants signed a memorandum of understanding this week to collaborate on exploration, production, refining, natural gas, petrochemicals, and more.

But the headline item?

Deepwater exploration in the Gulf of Mexico.

Petrobras…