Mexico's Pemex Begins Developing Deepwater Gas Field

State oil monopoly Petroleos Mexicanos has begun developing a natural gas field under 3,000 feet of water, the deepest the company has ventured into the Gulf of Mexico to date, the company posted on its Web site.

Pemex, as the company is known, discovered the Holok-Temoa hydrocarbons complex in 2006 after drilling the Lakach exploratory well. The move underscores Pemex's need to develop higher-cost oil projects as its traditional fields run dry, such as the giant Cantarell field where output is in steep decline.

At Holok-Temoa, Pemex plans to drill new fields to determine the size of the complex, and begin building infrastructure to transport the gas from the ocean floor to processing plants along the coast.

Since 2004, Pemex has made four discoveries in deep waters of the Gulf, and the company is currently completing Tamil exploratory well. The company plans to spend $300 million this year on another two deepwater exploration wells.

Pemex is playing catch up in deepwater. Oil majors operating in the U.S. Gulf of Mexico are developing oil projects in waters up to 9,000 feet. Mexican oil officials have suggested Pemex team up with outside firms to acquire deepwater technology and split capital costs, enabling the country to tap similar oil fields that are under development in the U.S.

Copyright (c) 2008 Dow Jones & Company, Inc.