On April 15 2002 Pemex released the first term sheet for the long-awaited multiple services contracts (MSCs). Under an MSC a contractor will be hired to perform a wide variety of services under a single contract. Pemex believes that this process will lead to better coordination, a reduction of costs, a reduction of administrative complexity and an acceleration of the development of proven non-associated gas reserves.

The planned structure of the generic MSC, to be used in the different rounds, will be based on the current legislation. The legal nature and structure of these contracts would not differ significantly from the current practices for the contracting of individual services, except that a single contractor (or a consortium of contractors) will be responsible for performing several different services (eg, drilling wells, installing gathering pipelines and conducting field operations) under a single agreement. The contractors will be paid for their services in cash and will not gain any right to the oil or gas; nor will they gain any exclusive rights to explore or produce hydrocarbons. The contractors will not participate in the results of the production.

Pemex plans to finalize the model contract for the MSC in the third quarter of 2002 and has said that it plans to publish the first call for bids before the end of the year.

For further information in this topic please contact Rogelio L√≥pez-Velarde at Lopez Velarde, Heftye, Abogados by telephone (+52 55 50 81 1424) or by fax (+52 55 50 81 1425) or by email ([email protected]).