LEON, Mexico, Oct 8 - Mexico's new oil watchdog wants energy monopoly Pemex to ditch new contracts at its key Chicontepec oil field but the state-owned company said it could not abandon the project.
Juan Carlos Zepeda, head of the recently formed National Hydrocarbons Commission, told Reuters on Thursday the body was in the process of submitting its recommendations to Pemex, but the decision will ultimately be up to the company.
Pemex [PEMX.UL] has spent more than $3.4 billion on Chicontepec, whose large reserves promised to lift Mexico's oil output from near 20-year lows, but output has disappointed.
"Pemex has to stop and reflect if it wants to continue contracting before revising its technological development plan," Zepeda said in an interview.
Pemex Finance Director Esteban Levin said the project was too valuable to ditch any time soon.
"Chicontepec is Mexico's biggest hydrocarbons reserve so it is not a project we can suddenly turn our back on and say we are not going to do," Levin told reporters at a climate conference in the central Mexican city of Leon.
"We have to give it time," he said.
Zepeda said the regulator was recommending Pemex halt new contracts, and perhaps revise existing ones, at the sprawling and technologically complex field near the Gulf of Mexico.
"You can't stop contracts that are already in progress .... maybe they could be renegotiated," Zepeda said.
He said the commission was talking to Pemex about the issue and would present its recommendations by the end of the year.
A Pemex spokesman said the issue would very likely be discussed at the company's Oct. 15 board meeting.
Juan Carlos Zepeda, head of the recently formed National Hydrocarbons Commission, told Reuters on Thursday the body was in the process of submitting its recommendations to Pemex, but the decision will ultimately be up to the company.
Pemex [PEMX.UL] has spent more than $3.4 billion on Chicontepec, whose large reserves promised to lift Mexico's oil output from near 20-year lows, but output has disappointed.
"Pemex has to stop and reflect if it wants to continue contracting before revising its technological development plan," Zepeda said in an interview.
Pemex Finance Director Esteban Levin said the project was too valuable to ditch any time soon.
"Chicontepec is Mexico's biggest hydrocarbons reserve so it is not a project we can suddenly turn our back on and say we are not going to do," Levin told reporters at a climate conference in the central Mexican city of Leon.
"We have to give it time," he said.
Zepeda said the regulator was recommending Pemex halt new contracts, and perhaps revise existing ones, at the sprawling and technologically complex field near the Gulf of Mexico.
"You can't stop contracts that are already in progress .... maybe they could be renegotiated," Zepeda said.
He said the commission was talking to Pemex about the issue and would present its recommendations by the end of the year.
A Pemex spokesman said the issue would very likely be discussed at the company's Oct. 15 board meeting.
