HOUSTON, Nov. 2 -- Officials at Petroleos Mexicanos SA (Pemex) are "working around the clock" to develop a model multiple service contract they can introduce this year to get foreign companies to help explore and develop Mexican natural gas resources early next year, an executive of the national oil company said Friday in Houston.
That initial international effort would focus on the Burgos basin in northeastern Mexico, where a production increase of 1 bcfd to a total 2 bcfd is "achievable," said Dominguez Vargas, first vice-president of technology and professional development for Pemex.
In forging that contract model, Pemex officials are being careful "not to change any Mexican laws. That could take a lot of time," said Vargas at a 2-day conference on Mexican Energy organized by the Center for Business Intelligence.
Dating back to when Mexico nationalized its oil industry in the early days of the 20th century, the Mexican constitution strictly limits foreign investments in its energy sector, with ownership of oil and gas reserves restricted to the state-owned oil company.
However, Pemex gas production is projected to be 2 bcfd short of Mexican market demand by 2008. The company therefore is anxious to find and develop new natural gas reserves as quickly as possible.
"Mexico's gas problem rests in the years of lag and low levels of investment in exploration that have neglected the Tamaulipas and Veracruz central (areas)," Vargas said.
Although Pemex aspires to become one of the top five oil and gas companies in the world during the next 25 years, he said, it now lacks the capital and technology that it needs to find and develop supplies of non-associated gas.
Mexico currently produces 1.3 tcf/year of primarily associated natural gas from reserves of 30.4 tcf, with production declining slightly since 1999.
Pemex's new Strategic Gas Program (PEG), with a 6-year budget of $5.6 billion, is aimed at discovering and developing new dry gas fields onshore and light oil fields with a high gas-oil ratio offshore in the Southeast Zone as well as in other offshore, shallow-water locations.
Vargas provided no hints as to the details of the model multiple service contract that Pemex is now forging.
However, Raul Muñoz Leos, the new director general of Pemex, recently indicated to Wall Street analysts and investors that the contracts could be structured for either service companies or major integrated oil companies (OGJ Online, Sept. 6, 2001).
Muñoz Leos wants to see foreign companies spend $2 billion/year building Mexican crude production; Pemex wants an ambitious $33 billion invested in oil, gas, and petrochemicals over 5 years. During that time Muñoz Leos hopes to double crude production to 4 million b/d and at least double gas production.
Although exploration and development of non-associated gas is a priority for Pemex, Vargas said the first targets of the multiple service contracts would be in developed basins that include Burgos, Veracruz, Sabinus, and Macuspana.
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