January 3, 2011 by Barry Pound at 4:25:52 pm
In a move designed to raise production in several mature oilfields, Mexico’s state-controlled oil company has approved a new contract model for exploration and production projects. Pemex says the new model will compensate contractors on a performance-based, per-barrel fee basis, a change that Pemex expects to increase investment interest from domestic and foreign oil companies.
“This announcement is the result of reforms in Mexico's energy laws that allow Pemex to grant performance incentives that will hopefully reverse a decline in production during the past several years,” says Gabriel Ruiz of the Monterrey office of Thompson & Knight. “Although there is some skepticism that this move will be enough to attract all of the economic and technological resources to address the Mexican oil industry’s complex challenges, contractors are actively analyzing the agreement and the opportunities it presents."
Reportedly the initial performance-based accords for exploration and production are likely to be awarded sometime in 2011 for three mature field projects in the Santuario, Carrizo and Magallanes areas of southeastern Mexico. At a later stage, Pemex intends to apply the new model to energy reserves in other regions, as well as deep water exploration and production in the Gulf of Mexico.
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