Petrobras Wins Another Burgos Basin Block in Mexico

A consortium led by Petrobras won a second block to develop gas fields in Mexico after a bid by a Chinese consortium was rejected on technical grounds. The group formed by Petrobras, Japan's Teikoku Oil Co. and Mexico's D&S Petroleum, bid $256 million for the Fronterizo block, the sixth of seven being tendered to produce gas in the Burgos basin.

But Pemex officials said the bid by Houston-based Amistad Energy Corp., formed by China's Daquing Oilfield Limited-Downhole Service Sub-Company, a unit of the China National Petroleum Corporation, and Tiainjin Dagang Shengkang Petroleum Technology Development Co. Ltd., didn't meet its technical requirements.

With the technical proposal rejected, the economic bid wasn't opened.

The contract for Fronterizo is expected to be awarded later Wednesday. The Petrobras-led consortium won an earlier block, Cuervito, with a $260 million bid.

Under the 20-year multiple service contracts, Pemex hopes to raise production at Burgos to 2 billion cubic feet a day from the current 1 Bcf/d, with investment between $8 billion and $10 billion.