Which means that the drillers will get paid upfront. The risk cost of "dry holes" will be absorbed by Pemex.
Posted on 04/03/2009 8:40:39 AM PDT by thackney
State-owned Petroleos Mexicanos has awarded bids totaling some $5.39 billion thus far in 2009, the company said in a statement.
The most recent contract, worth close to $687 million, is for drilling and completing 500 oil wells in the complex, onshore Chicontepec Field, which covers a 3,800-square-kilometer (1,470-square-mile) area in the east-central Mexican states of Puebla, Veracruz and Hidalgo.
Pemex is hopeful that output at Chicontepec can eventually total between 600,000 and 700,000 barrels per day by 2017, but technically challenging horizontal drilling techniques must be employed at thousands of wells to get at the oil, which is found in small pockets in densely populated rural areas.
Chicontepec is believed to hold roughly 17.7 billion barrels of crude, or 39 percent of the country's total petroleum reserves.
President Felipe Calderon last year sought to push a controversial plan through Congress to overhaul Pemex, including allowing the cash-strapped company to take on private oil firms as full partners in the exploration and drilling of new deepwater deposits in the Gulf of Mexico.
But leftist lawmakers fiercely opposed the initial bill, claiming that the aim of the government was to privatize Pemex, created after President Lazaro Cardenas' nationalization of the oil industry in 1938.
After months of debate, a revised bill was passed that gives Pemex more freedom to undertake projects with private firms, but excludes the provisions of Calderon's original initiative that would have allowed them a stake in the oil or any eventual profits.
Pemex expects average output this year of 2.75 million barrels per day of crude and 6.45 billion cubic feet per day of natural gas; crude production fell 9.2 percent in 2008 compared to the previous year, coming in at just under 2.8 million barrels per day.
Pemex is making a big effort to develop Chicontepec to offset declining production at aging projects such as the offshore Cantarell Field, once Mexico's crown jewel.
Output at Mexico's current largest field, Ku Maloob Zaap in the Bay of Campeche, also is expected to peak over the next four years and then start declining.
Interesting.
Which means that the drillers will get paid upfront. The risk cost of "dry holes" will be absorbed by Pemex.
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