Mexico's Pemex announces 3rd round of private contracts for July

MEXICO CITY Thu Dec 20, 2012 5:26pm GMT

Related Topics

MEXICO CITY Dec 20 (Reuters) - State oil monopoly Pemex on Thursday announced it will bid out to private contractors six oil fields, all of which are located in the country's Chicontepec basin, home to Mexico's largest certified hydrocarbon reserve.

The auction, to take place in July, will mark the company's third round of private, incentive-based service contracts designed to boost production in mostly aging oil fields.

The blocks up for grabs -- Pitepec, Amatitlan, Soledad, Miquetla, Humapa and Miahuapan -- include 2.205 million barrels of crude oil equivalent, or 15 percent of Chicontepec's proven, probable and possible (3P) reserves, Pemex said in a statement.

The company added that the average size of the blocks is 125 square kilometers, each containing about 400 million barrels of medium to light grade crude.

The blocks up for bid within the geologically complicated Chicontepec basin, where drilling has continued for more than 80 years, are located onshore in the east-central states of Veracruz and Puebla.

Mexico is the world's No. 7 oil producer but output has stagnated in recent years, dropping by roughly a quarter since hitting a peak of 3.4 million barrels per day in 2004.

On Tuesday, Pemex announced that November crude production reached 2.577 million barrels per day, the highest level of average output in nearly two years.

In a bid to shake up an industry that has been under state control since 1938, the government has allowed private companies to operate - but not to own - oil fields scattered around the country.

Under the private contracting scheme, fruit of reforms passed by Mexico's Congress in 2008, companies win the right to extract oil from mature fields and are paid a set fee per barrel as an incentive, but the crude belongs to Pemex.

The scheme was designed to lure private investment and increase output.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.