Pemex plans gas contracts

After delaying the bidding for controversial new contracts to produce natural gas in northern Mexico, Pemex now expects to award the contracts by mid-2003, a company official has said. Pemex is postponing the tender process for the contracts from November/December to allow them to include changes to a recently announced public works law due to enter into effect in January. Under the new timetable, the data room for bidders will open in January and the tenders begin in February next year. Mexico hopes the contracts will enable the country to boost output by around 1.0 billion cubic feet per day (Bcfd) by 2006 from around 4.4 Bcfd currently and reduce dependency on imports. Mexico aims to attract up to USD 8 billion in investment in the contracts, which would be to produce non-associated natural gas, or gas that is produced independently from crude oil, in six areas, or blocks, across the border from Texas. The contracts are controversial because they envisage granting greater operating independence to private firms and are renewable for 20 years, which critics say amounts to a concession, although any gas produced would belong to Pemex.

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