Japan Opens Wallet for Mexico Oil, Gas Project

TOKYO (Nikkei), Mar. 5, 2010

The Japan Bank for International Cooperation will lend $600 million to help Mexico's state-owned Petroleos Mexicanos (Pemex) develop oil and gas fields in the Chicontepec Basin, northeast of Mexico City, the Nikkei reported in its Friday evening edition.

Mexico is a major producer of crude oil, but its output is expected to soon plunge if development efforts flag.

The loan -- to be one of the largest ever for a Mexican oil field project -- is designed to help the country maintain crude output at current levels over the long term. It is also aimed at strengthening Japan's relations with oil-producing nations in Central and South America so that it can ease its heavy reliance on the Middle East.

The oil and gas fields earmarked for development have proven reserves of 700 million barrels of crude oil, according to JBIC. Pemex targets a production level of roughly 510,000 barrels of crude a day there in 2023, one-sixth of Mexico's present output. It also aims to yield some 600 million cubic feet of natural gas a day the same year, 10% of the country's current output.

Some of the gas produced there will be supplied to the thermal power stations of Mexican-based independent power producers owned by Japanese trading houses.

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