UPDATE 3-Mexico limits shallow-water bids in oil sector opening
(Adds minister meeting)
By David Alire Garcia and Adriana Barrera
MEXICO CITY Dec 11 (Reuters) - Mexico said on Thursday it would cap the number of shallow-water projects companies can bid for as it set out initial contracts for the historic opening of its oil and gas industry, but did not specify the share the government will take.
Following a reform that ended Mexico's 75-year state monopoly, officials unveiled details of the first production-sharing contracts to an audience that included executives from Chevron Corp and Exxon Mobil Corp .
The contracts are for 14 shallow-water exploration and production (E&P) blocks that will pay winning companies with a share of the output from projects, which the government estimated would cost $20 per barrel on average to produce.
"For the first time, we're setting in motion public tenders in which both national and international companies can explore for, and eventually extract, fossil fuel resources in shallow waters," said Energy Minister Pedro Joaquin Coldwell.
Nine-tenths of the formula used to award the 25-year contracts will depend on the share of operating profits a company offers the government, with the rest dictated by how much investment a company pledges.
Companies or consortia will be limited to bidding on up to five shallow-water areas, and will have to show a track record in offshore projects. No company can join more than one consortium in the first round, the government said.
Fabio Ortega, the top executive in Mexico for Colombia's publicly traded, state-controlled oil company Ecopetrol SA , said the limits are not standard practice. Continuación...