Pemex Wins Legal Rulings on MSC Legality, Prepares New Tenders

Mexico's state-owned oil company Pemex has won nine rulings related to the legality of multiple services contracts (MSCs), clearing the way for Pemex to resume awarding MSCs for natural gas exploration and production to private companies in 2006, Pemex said in a statement.

Pemex temporarily suspended awarding MSCs in June 2005 due to legal problems as some lawmakers alleged they were unconstitutional.

However, of the four injunctions presented in 2004, two have been resolved in Pemex's favor and two more are expected to end soon with the same outcome, the statement said.

Pemex also won another lawsuit presented by the national oil workers union against MSCs in 2004 after two judges ruled in Pemex's favor.

However, due to ambiguities in the existing legislation leading to varying interpretations, the federal audit office has asked Pemex not to tender new MSC contracts until the law is modified.

With the favorable court rulings, Pemex will restart MSC tenders once it receives the green light from the audit office.

The eight contracts awarded in the first two rounds of MSCs are expected to bring in about US$6.34bn investment, increase natural gas production by 655 million cubic feet a day (Mf3/d), thus decreasing imports, and attract new technologies expected to increase Pemex's efficiency in general.

April 2004 and October 2005 the MSCs brought in investments totaling US$140mn to drill 69 wells, which are producing 106Mf3/d of natural gas.

Mexico has saved US$320mn in natural gas imports thanks to production from wells under MCSs, the statement said.

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