Mexico's Pemex not seeking risk-sharing alliances

MEXICO CITY, June 29 (Reuters) - Mexico's Pemex is not seeking to pair up with foreign companies in risk-sharing alliances that would require legal changes, a senior executive at the state-owned oil monopoly said.

Exploration and Production head Carlos Morales told an oil industry event in the eastern port of Boca del Rio on Thursday Pemex would limit itself to hiring private firms via fixed-fee service contracts that do not breach a constitutional clause giving Pemex the sole right to drill for oil and gas.

"We are not proposing anything that goes beyond that or that implies that in the future we are going to have a change in legislation," Morales said, in comments made available by Pemex on Friday.

"We will continue, in all our activities, to respect the law that we have today," he said.

With yields falling at Mexico's most productive oil field, Cantarell, Pemex is under pressure to start pumping oil out of potentially huge deepwater deposits in the Gulf of Mexico.

However, analysts see Pemex struggling to do that without the help of foreign oil majors, who are unlikely to share their deepwater know-how for anything less than a share in profits.

Morales said there was no plan to design a risk-sharing model for the deepwater sector, Pemex said in a statement.

The debate over easing barriers to foreign investment in Mexico's oil sector has been raging for years, pitting foreign analysts and business-minded Mexicans against a sizable bloc that opposes anything smacking of privatization.

Mexico is the world's No. 5 producer of crude, and Mexicans are fiercely protective of their oil industry, which was nationalized and foreign firms booted out in 1938.

But years of low investment as the government siphoned off most of Pemex's revenues in tax have left Pemex hard-pushed to develop new oil fields fast enough to cushion Cantarell's decline.

Morales said that by 2015 Cantarell will only account for 14 percent of Mexican crude oil production, down from 48 percent in 2007. Until about a year ago, Cantarell accounted for 60 percent of Mexico's oil output.

Morales repeated Pemex's goal to lift output at newer oil fields and keep overall production steady at 3.1 million barrels per day for the next few years.

More than half the prospective oil reserves Pemex is trying to confirm lie in water depths of at least 500 meters and often much deeper. Drilling at water depths like 1,500 meters can more than triple production costs from around $4 per barrel in shallow seas.

Pemex executives including Morales said in past years they were keen to develop strategic alliances in deepwater oil.