June 6, 2012 / 9:24 PM / 8 years ago

Chevron, Repsol among bids for Mexico oil contracts

* Second round of contracts to be awarded June 19

* Contracts expected to attract $215 mln in first 2 yrs

* Oil production to rise by 140,000 bpd from 13,000 bpd

By Mica Rosenberg and David Alire Garcia

MEXICO CITY, June 6 (Reuters) - Mexico’s state oil monopoly Pemex on Wednesday released a list of 16 private consortiums bidding for a second round of oilfield operating contracts to boost foreign investment in the country’s lagging energy sector.

Oil major Chevron and Spanish energy firm Repsol are among the bidders, interested in 22 mature fields in six areas in the states of Tamaulipas and Veracruz.

The contracts will be awarded on June 19 based on which company can produce the most oil at the lowest price per barrel.

The fields have already been tapped but are in decline and Pemex hopes private companies can help increase their production by around 140,000 barrels per day (bpd) from the 13,000 bpd today, doubling output in Mexico’s northern region.

Two areas are offshore in shallow waters and the other four are onshore. Pemex said the contracts would bring $215 million of investment to the fields in the first two years.

This is the second round of contracts to be given out under a historic 2008 oil reform that cracked open the nationalized industry for the first time in more than 70 years.

The world’s No. 7 producer has managed to stabilize oil output at around 2.5 million bpd after a sharp decline at its largest fields.

Pemex, however, needs to ramp up exploration to avoid becoming a net crude oil importer within the next decade.

More than half of the country’s oil resources — 29 billion barrels of crude equivalent — lie in deep waters in the Gulf of Mexico where Pemex also plans to launch new contracts.

But major oil companies and energy analysts say there needs to be a second-generation oil reform to create the incentives needed for the risky and expensive projects.

Under Pemex’s current contracting scheme, foreign companies are paid according to the profitability of the field but the reserves remain the property of Mexico.

The first contracts for several onshore, mature fields further south were awarded last August and these will begin production in February.

Pemex says that in the 22 fields for which companies are bidding, the proven, possible and probable (3P) reserves total about 220 million barrels of oil, while total prospective resources are estimated at 1.672 billion barrels of oil equivalent.

More contracts, including for the geologically complicated Chicontepec oilfields, are unlikely to be awarded before a July 1 presidential election.

The front-runner in the race, Enrique Pena Nieto from the opposition Institutional Revolutionary Party, or PRI, has called for deeper energy reform that would attract more private capital, eyeing Brazil’s Petrobras as a model.

Petrobras is listed on the stock market but controlled by the Brazilian government, which retains significant influence over the company’s management.

The runner-up in voter opinion polls is leftist Andres Manuel Lopez Obrador, who narrowly lost the 2006 presidential election and is opposed to more foreign involvement in Pemex.

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