Pemex to Call for Bids on 3-4 Chicontepec MSCs

Mexico's state oil company Pemex plans to call for bids on multiple service contracts (MSCs) for 3-4 blocks in the northern area of its onshore Chicontepec oil and gas reservoir, a Pemex official told reporters Wednesday.

Developing Chicontepec - the country's last virtually untapped land reserve - will require investment of 300bn pesos (US$27.2bn) over the next 19 years, the deputy director of Pemex Exploration & Production (PEP) north region, Alfredo Guzman, said at Pemex's annual oil technology conference (Exitep) in Veracruz city on the Gulf coast.

Chicontepec has been divided into two areas, north and south, Guzman said. Pemex will develop the southern region but will divide the northern section into 3-4 blocks and put them out to bid, he added, without saying when the tender will take place.

MSCs have been used in non-associated gas in the Burgos basin in the north of the country. The technically challenging Chicontepec reserve - 250km east of Mexico City in mountains straddling Veracruz and Puebla states - has associated gas, and Pemex is studying how to adapt the MSCs to local characteristics. Chicontepec represents 37% of Mexico's total reserves, and according to Pemex estimates has about 18 billion barrels of oil equivalent including about 12 billion barrels of oil reserves. The area consists of numerous small fields in reservoirs with low permeability, complex sands distribution and a 7-10% crude recovery factor.

A consortium of three companies - ICA Fluor, Schlumberger and Drilling Technologies - is drilling 250 exploratory wells, Guzman said. Pemex is drilling 50 wells. To date Pemex has invested 10bn pesos in exploring the region and another 31bn pesos investment should be authorized soon, Guzman added.

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