Mexican president seeks foreign oil investment

Mexican President Felipe Calderon sought to sell the heads of the world's biggest energy companies on his nation's oil industry, touting new openings for foreign firms, his office said. Oil executives he met with on the sidelines of the World Economic Forum in Davos, Switzerland, said the current slump in crude prices could lead them to rethink production and exploration plans, Calderon's office said.
"We have reformed the oil industry in Mexico, and though it seems impossible, we managed to change the law to allow Pemex, the state-owned oil company, to receive investment and participation through performance contracts," Calderon said in a separate speech in Davos.

A law approved last year allows Petroleos Mexicanos, known as Pemex, more flexibility in hiring private firms for exploration and service contracts in a bid to boost sagging output. But it doesn't allow traditional risk-sharing contracts or direct investment, and permits only limited forms of bonus payments for performance on contracted work.
Calderon spoke privately with top officials from ExxonMobil, Royal Dutch Shell, Chevron, BP, Italy's ENI, Norway's StatoilHydro, Brazil's state-run Petroleo Brasileiro, and French companies Total and GdF Suez, his office said.

Oil is Mexico's top source of foreign income, financing about 40 % of its federal budget. Yet aging oil fields and sagging investment by cash-strapped state oil monopoly Petroleos Mexicanos have caused oil output to fall by about 17.5 % since 2004, when it peaked at about 3.4 mm bpd.
The country's largest oil field, known as Cantarell, is drying up, and Pemex hopes deep-water reserves in the Gulf of Mexico will offset sliding production. It lacks the expertise to develop those fields alone, but Mexico's constitution still bars Pemex from signing strategic alliances or risk-sharing contracts with the foreign and private sector companies who have the equipment and expertise.

Mexico is also seeking cooperation from US oil companies now believed to be tapping much of the deep water crude that lies in shared deposits along the US-Mexico border, Energy Secretary Georgina Kessel said Jan. 14. Pemex has so far drilled six deep-water wells in the Gulf, while hundreds of such platforms are pumping crude in nearby US territory, sparking concerns of a "straw effect" that could ostensibly drain oil from border-straddling reservoirs.
Mexican oil output fell 9.2 % last year to 2.8 mm bpd, and Kessel said it would hover around 2.7 to 2.8 mm bpd through 2010 until new oil fields allow it to boost capacity.