Mexico's changing policies offer opportunities in natural gas ///

n the spring of 2001, Mexican President Vincente Fox stated that Mexico must increase its daily gas production to 10 Bcfd from 4 Bcfd by 2010, to become and remain self-sufficient in energy. To help address the country’s growing demand for gas, state oil company Pemex has announced it will offer "service contracts," whereby outside operators will assist Pemex with Mexico’s non-associated gas production. Since Mexico privatized its petroleum industry in 1938, no outside operators have been allowed to produce the country’s vast energy resources. It appears that Pemex needs to rapidly expand its technological capabilities to effectively produce some of the more complex areas. The most effective means to accomplish this goal is to bring in outside operators with specific technical experience and success in certain geologic formations. Pemex has announced a licensing round for 2002, but the proposed service contracts are rather complex. In their present form, they may not be viewed to be as financially lucrative as necessary to attract the kind of interest that Mexico needs from its initial licensing round.

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