Mexico: a foot in the door

Since nationalisation, in 1938, only Mexican companies, for which generally read state-owned Petróleos Mexicanos ? Pemex ? have been entitled to exploit the country?s oil and gas wealth. The forbidden world of Mexican hydrocarbons production has just been briefly thrown open to foreign oil firms, writes Nigel Ash

DRIVEN BY burgeoning domestic demand for gas, in June 2002, the government of President Vicente Fox decided to offer foreign oil services companies seven blocks in the Burgos area. An extension of the Texas gas play, Burgos is Mexico's main non-associated gas region, with production of 1bn cubic feet a day (cf/d). However, Pemex hopes to double that by enlisting the services of the private sector. By law, Pemex can only hire contractors on a fee basis. The development and operation of the blocks has been offered on a fee-for-services basis by bundling together several functions into a so-called multi-service contract (MSC). Operators will own no equity in projects and will, therefore, be una