Petrobras & Teikoku Sole Bidders for Cuervito Blk in Mexico

A consortium led by Petrobras and Teikoku presented the sole bid Wednesday for the second multiple service contract to produce gas for Pemex.

Pemex said that the bid was for Cuervito, the second of seven blocks of natural gas reserves being tendered for development in the Burgos gas fields of northeastern Mexico. Pemex is expected to award the contract Thursday, assuming the bid passes technical evaluation and is within the company's price limit. The financial bid will also be disclosed Thursday.

The investor group bidding for Cuervito also includes D&S Petroleum, a Mexican upstream and downstream gas contractor for Pemex.

Bids for the remaining five blocks in the current round of tenders will be received each Wednesday during the next three weeks. Total investment in the seven blocks is expected to be between $6 billion and $8 billion.

Through the multiple service contracts, Pemex hopes to add 1 billion cubic feet a day of natural gas to its production, which it aims to raise to 6.9 billion cubic feet a day in 2006 from 4.5 Bcf/d at present.

Burgos lies across the U.S. border from Texas' most-productive gas fields. It is Mexico's main non-associated gas-producing region, with current output about 1 Bcf/d.