Mexico's state-owned Petroleos Mexicanos said Friday it expected three oil companies awarded service contracts in a just-concluded auction would invest some $900 million annually.
Pemex awarded the three incentive-based contracts to the Mexican unit of U.S. oilfield services giant Halliburton, Operadora de Campos DWF and Petrolite, which will develop mature onshore fields in the Chicontepec region of the Gulf coast state of Veracruz.
Those geologically complex areas, which require vast numbers of low-producing wells, were not being developed because they required more technically advanced drilling methods.
The three assigned blocks hold 3P (proved, probable and possible) reserves estimated at nearly 500 million barrels of oil equivalent, while three other Chicontepec areas also available in the auction attracted no offers.
A recent oil sector overhaul gave Pemex - created when the country's oil industry was nationalized in 1938 - more freedom to undertake projects with private firms, which are hired under incentive-based service contracts.
Mexico's constitution bars Pemex from entering into any arrangements whereby contractors would receive any share of the oil produced.
The head of Pemex's exploration and production unit, Carlos Morales Gil, told Radio Formula Friday that the three Chicontepec blocks that did not attract any bids on Thursday would be put up for auction again in two or three weeks.
Morales said Pemex expected the three blocks awarded Thursday would yield some 150,000 barrels per day of additional production. Pemex currently produces 2.5 million bpd annually.
"The expectations are very high. It's a reserve that currently is in a certain sense inactive because we haven't made the investments needed to develop it," he added.
The oil extracted by the contracting companies will belong to Pemex, which will pay the companies a per-barrel fee, as well as bonuses for output above a set ceiling.
Halliburton will receive 1 cent per barrel produced, while DWF and Petrolite will get 98 cents and 49 cents, respectively. EFE