Mexico's Pemex signs the first mixed contract with private companies to boost oil production

According to a government report presented to Congress by President Claudia Sheinbaum, the Mexican state oil company Pemex has signed its first mixed contract with private sector partners to try to reverse the declining hydrocarbon production.

In her first report to Congress, sent on Monday, President Cristina Fernandez said that the 11 agreements, which were signed under a newly-created contractual framework resulting from the most recent energy reform, marked the beginning of Pemex’s plan to sign 21 similar deals this year.

The company anticipates that the initiative will add up to 450,000 barrels of crude oil per day (bpd), by 2033.

The document states that "Pemex has begun the formalization of a second allocation under the same scheme. It is anticipated that the closure of this group will be before the end the year."

Local media reported that Pemex has a financial debt of nearly $100 billion and also owes another $22 billion in contractor and supplier payments. The company expects to raise $8 billion from the first eleven contracts it signs with domestic and international partners.

The deal is expected to increase oil production by around 70,000 barrels per day and natural gas production by 610 million cubic meters per day.

Pemex also recently presented a new 10-year strategy plan, which aims to make the company more financially viable, increase reserves and increase domestic oil production from 1.6 millions bpd to 1.8million bpd. (Reporting and Editing by Bill Berkrot.)

(source: Reuters)