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34

Petrobras Turns Mexico Down

Petrobras chief executive, Sergio Gabrielli said they would not be willing to work in Mexico as a service company, being paid a set rate rather than taking a share of oil production

Petrobras chief executive, Sergio Gabrielli said they would not be willing to work in Mexico as a service company, being paid a set rate rather than taking a share of oil production.

His comments are disappointing for the Mexican government, which faces a mounting crisis in its oil industry.

The Brazilian company had been in negotiations with Mexico, Gabrielli told the Financial Times.

He also said that “I think we are not willing to go there as a service company”.

Oil production, for so long the pillar of Mexico’s economy and from which the government receives almost 40% of its income, is falling faster than expected.

In November 2004, Mexico produced an average of 3.4 million barrels per day.
In November last year, by contrast, it produced just 2.9 million.

State-owned Pemex lacks the money and technical expertise to explore for oil in deep waters, where most analysts believe Mexico’s future lies.

Petrobras is a world leader in deep-water exploration.

Gabrielli refused to comment on suggestions that his company would be more acceptable in Mexico than ExxonMobil of the US, saying the issue was “very sensitive”.

He also refused to comment on Mexican policy, saying “they have to decide”.
At the same time, Mexico was “trying to get drilling rigs for their own operation. They’re moving”, he said.

Pemex is replacing current production with new finds at a rate of only about 20%. That is very low compared with new discoveries made by the world’s leading oil companies.