Mexico to offer more oil service contracts to speed E&P

Raul Muñoz Leos, the new director general of Petroleos Mexicanos SA, Thursday told Wall Street analysts and investors Pemex plans to offer multiple service contracts by next spring to speed exploration and production.

Sept. 6, 2001

Maureen Lorenzetti
OGJ Online

NEW YORK, Sept. 6 -- Raul Muñoz Leos, the new director general of Petroleos Mexicanos SA, Thursday told Wall Street analysts and investors Pemex plans to offer multiple service contracts by next spring to speed exploration and production.

The Mexican constitution limits the role foreign investors can play in the oil industry, with ownership of reserves restricted to the state-owned oil company (OGJ, May 7, 2001, p. 58).

Nevertheless, Muñoz Leos expressed confidence that the contracts could be structured to entice investments by either service companies or major integrated oil companies.

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: he anticipates Mexican gas output being 2 bcf short of demand by 2008.

Analysts question if the new Mexican government headed by President Vicente Fox will be able to carry through with those ambitious plans.

Muñoz Leos said the new leadership intends to redouble efforts to change Pemex from a government bureaucracy to a market-driven enterprise.

Contact Maureen Lorenzetti at [email protected]