By OGJ editors
HOUSTON, Oct. 21 -- Repsol-YPF SA plans to invest $170 million for exploration and development in the next 3 years in Mexico's Burgos basin.
The Spanish-Argentine major oil and gas company is the first foreign company to be allowed to participate in Mexican hydrocarbon E&D since nationalization in 1938.
It bid more than $2.4 billion under Mexico's multiple service contract (MSC) program for work on the Reynosa-Monterrey block in the natural gas-prone basin (OGJ Online, Oct. 16, 2003). The bid came as part of an economic proposal that covers the value of goods and services to be provided over a 20-year contract; this includes development of infrastracture and maintenance of production for that period.
State oil company Petroleos Mexicanos is offering the MSCsessentially turnkey service contracts awarded to operating companiesin an effort to boost domestic hydrocarbon supplies to meet rapidly growing demand without running afoul of constitutional bans on foreign ownership of reserves.
Of its planned 3-year outlay, Repsol-YPF has earmarked $42 million for work in 2004. That will entail acquisition and processing of 700 sq km of 3D seismic data, with surveys to begin in the first quarter. Plans call for drilling eight development wells immediately thereafter.
The 3,552 sq km Reynosa-Monterrey block is in Northeast Mexico, bordering the US south of the Rio Grande. It includes 16 gas fields that already are producing.
Repsol-YPF said the first-year outlays will result in gas production beginning in 2005. The company expects production to increase to 2 million cu m/day of gas by 2007 from the current level of 400,000 cu m/day.
Repsol YPF also participates in gas distribution in the Mexico City area through the local distribution company Gas Natural, which serves 1 million customers in Monterrey, Nuevo Laredo, Saltillo, El Bajío, and Toluca states. Mexico in recent years has opened up its gas distribution sector to private ownership.