Pemex to Boost Oil Exploration in Southern District

MEXICO CITY (Dow Jones Newswires), Jul. 7, 2009

Mexico is increasing oil exploration in a group of states south of the Gulf of Mexico to book reserves and offset declining output at existing wells.

State-run oil company Petroleos Mexicanos is seeking companies to design oil wells and oversee exploratory drilling starting in November under a two-year contract, according to a tender notice published on Compranet, the state procurement website.

Mexican oil production fell 9% last year, and the company is increasing its exploration spending to correct years of low investment that has caused output to fall by a fifth since 2004.

"The southern region currently has a large amount of drilling activity, with the goal of discovering new reservoirs and developing existing ones," said Pemex in the notice.

Pemex plans 18 exploration wells in the southern district this year and in 2010, compared to just three in 2008, according to a drilling map included in the notice. The southern district includes the states of Veracruz, Tabasco, Chiapas, Campeche and Oaxaca.

Pemex drilled a total of 65 exploration wells in 2008, 33% more than the year earlier. Over the past year, Pemex increased production in the southern district by 10%, to 492,717 barrels a day in May, or 19% of total production.  

Copyright (c) 2009 Dow Jones & Company, Inc.


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