Pemex Launches New Incentive-Based Contracts

MEXICO CITY (Dow Jones Newswires), March 2, 2011

Mexico's state-owned oil company Petroleos Mexicanos, or Pemex, has launched its new incentive-based contracts in a bid to diversify its projects and increase crude oil production levels.

Pemex Chief Executive Juan Jose Suarez Coppel said the first tenders under the flexible contracts will be for six fields in Tabasco state, in southeastern Mexico.

The six fields, in three different areas, are expected to reach production of about 50,000 barrels a day, he said at a conference.

Pemex produced 2.58 million barrels a day of crude oil on average in 2010, and is aiming to maintain production around that level this year, with expectations that output will increase in subsequent years.

The incentive-based contracts are expected to give oil companies greater flexibility than they would have under Pemex's standard services contracts, which aren't attractive for oil majors that prefer risk contracts. Mexico's constitution prohibits oil or gas concessions for private or foreign companies.

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