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Saturday, 30 August, 2008, 11:20 GMT | more prices >>

Mexico flags up border drilling fears



By Upstream staff 

Fears that US drilling in Gulf of Mexico oilfields close to the maritime border with Mexico could drain Mexican reservoirs are putting pressure on Mexico to change its energy laws, Energy Minister Georgina Kessel said today.

Kessel said US players could start extracting crude in 2010 from fields sitting on the maritime border with Mexico.

Starting from scratch and unable under current laws to team up with private partners, it would take Mexican oil monopoly Pemex a decade to start drilling on its side, she said.

"In two years the 'drinking straw' effect could happen," Reuters quoted Kessel as saying on Mexican television. "We would be losing wealth."

Senators from Mexico's three main political parties are in talks over what kind of cure to propose for Mexico's flagging oil industry, where years of under-investment have left output and reserves declining.

All parties broadly agree on giving Pemex more operational and budgetary autonomy.

Leftists, however, oppose the government's idea of allowing Pemex to form strategic joint ventures with foreign companies with the technological expertise to speed up Mexico's entry into the crucial deep-water sector.

Kessel said an oil sector reform would not necessarily need to touch the constitution, which bans direct private investment in oil and natural gas. But she said tweaking the constitution could be a way to clarify what Pemex is allowed to do.

"We will not be proposing, nor will we accept, any change that implies a transfer of ownership of crude oil to anyone else. It belongs to Mexicans and it will continue to belong to Mexicans," Kessel said.

"We are looking for Pemex to have the flexibility to be able to join up with any of the world's oil companies to be able to get into exploration and production in areas that are very difficult."

Senators aim to have a draft law ready to submit for debate before the current congressional session ends on 30 April.

Despite concern that debate will be lengthy, Kessel said she hoped a law could be passed this session.

Many fear that if the debate is put off until Congress reopens in September, lawmakers will be distracted by the approach of mid-term congressional elections in 2009.

Thursday, 14 February, 2008, 17:46 GMT  | last updated: Thursday, 14 February, 2008, 18:43 GMT

Deep-water fears: in the Gulf of Mexico
 

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