Pemex to invest $ 14.7 bn in 2002

Mexico's state-owned oil monopoly Petroleos Mexicanos, or Pemex, will invest 134 bn pesos ($ 14.7 bn) in 2002 out of a total budget of 218 bn ($ 23.9 bn) the company's director said. Raul Munoz Leos said the amount approved by Congress for the current budget represents Pemex' biggest year-on-year investment increase in two decades.
He said 28 bn ($ 3.07 bn) will be invested from budget funds, and 106 bn ($ 11.6 bn) will be financed investment. Pemex' average annual investment between 1996 and 2000 was 66 bn in current pesos ($ 7.24 bn).
The lion's share of this year's investment will be for exploration and production projects, mostly in the offshore Cantarell oil field, which is Mexico's largest, in the Burgos gas basin of north-eastern Mexico, and in the Grijalva River Delta, in southeast Mexico. Included in this year's planned projects are the controversial multiple-service contracts for natural gas production, particularly at Burgos.

The contracts, which could be for up to 20 years, have drawn criticism from senators who have demanded to see draft versions before any are awarded. Opposition parties say the multiple-service contracts violate the constitutional ban on private exploration and production of hydrocarbons in Mexico.
Pemex says the contracts are legal and simply combine in a single contract different services that the state company would tender to private contractors under the public works law anyway. "We have promised to send the Senate a model contract as soon as it's ready, and that obviously will be before we seek the corresponding tenders," which could be by the end of the third quarter, Munoz said.

Luis Ramirez Corzo, head of Pemex' exploration and production unit, said the contracts would be awarded according to the lowest bids on two- to three-year programs of minimum tasks to be carried out in areas of proven reserves. Under the contracts, Pemex expects to be producing an additional 1 bn cfpd of natural gas by 2006. Munoz said Pemex considers the multiple-service contracts to be the fastest way of reducing future natural gas imports.