Pemex awards Fronterizo block, reschedules Olmos

By Judy Clark
Associate Editor

HOUSTON, Nov. 25 -- After receiving two tenders and rejecting one for technical deficiencies, Mexico's national oil and gas company Petroleos Mexicanos (Pemex) selected a consortium led by Brazil's Petróleo Brasileiro SA (Petrobras) to develop the 371 sq km Fronterizo block in northeastern Mexico under a $265 million Multiple Services Contract (MSC). The 15 year contract includes gas field development, including the drilling of 100 wells; installation of infrastructure; and maintenance on the block in Nuevo Leon state. Production is to be increased by an estimated 34 MMcfd.

The other group bidding for Fronterizo—Houston-based oil field services company Amistad Energy along with a subsidiary of China National Petroleum Corp. Ltd. and the Chinese company Tiainjin Dagang Shengkang Petroleum Technology Development Co.—had their tenders disqualified because some required documentation was missing.

The contract is sixth in a controversial seven-part MSC program in which Mexico seeks to have operators other than Pemex develop nonassociated natural gas in the Burgos basin of northern Mexico (OGJ Online, June 10, 2003).

The Petrobras-led group, which also includes Teikoku Oil Co. Ltd. of Japan and Diavaz Group subsidiary D&S Petroleum of Mexico, also won a $650 contract Oct. 23 to develop the Cuervito block, the second MSC contract, also in Nuevo Leon (OGJ Online, Oct. 22, 2003). That contract was officially signed Friday.

Other contracts awarded
Pemex's goal is to increase natural gas production in the Burgos basin to 2 bcfd from1 bcfd.

To date contracts have been awarded for the Reynosa-Monterrey, Cuervito, Mision, and Fronterizo blocks. Work on all of these is scheduled to begin Jan. 9.

Pemex received no bids for the larger fourth and fifth blocks, Corindón-Pandura and Ricos, respectively, but company officials said the company would hold a second tender in 2004 for the blocks and meanwhile is scheduling a series of workshops "to reexamine the technical data, reevaluate the terms and conditions offered, and determine the suitability of a second bidding round" (OGJ Online, Oct. 29, 2003). The two blocks may be broken into several smaller blocks.

Deadline for submissions of technical and economic proposals for the final block, Olmos, originally scheduled for Nov. 18-19, has been postponed until Jan. 14 to give bidding companies more time to assemble necessary data. Work on that development currently is slated to begin in late February.

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