VERACRUZ, Mexico: Mexico’s state run oil company Pemex said it will have draft contracts for deepwater exploration deals ready in a month that could bring international oil firms back into Mexico after 70 years.

Reforms enacted last year to Mexican energy legislation allow Pemex to award deals that offer cash incentives to contractors.

The company hopes to use these contracts to bring in partners with the capital and technology needed to tap the virtually unexplored deeper waters of the Gulf of Mexico, where Pemex believes billions of barrels of oil await discovery. “In about a month we should have a draft contract,” Carlos Morales, the head of Pemex’s exploration and production unit said in Veracruz.

“One thing we are working on right now is the design of the areas (that will be offered),” he said. International oil companies are keenly awaiting the contracts that Mexico will offer as the first opportunity to work in the country since the oil and gas industry was nationalised in 1938.

Mexico hopes by bringing in international oil companies, it will be able to reverse the slide in oil production that began in 2004 and which threatens the country’s status as a major oil exporter.

Mexican oil production remains below 2.7m b/d, the goal set for this year, Morales said. But he said he remained confident that new wells due to begin producing later this year would put Pemex back on track to meeting its goal.

Among the areas that Pemex is counting on is the difficult Chicontepec project, where billions of barrels of oil are tightly locked in small pockets of rock, making production costly and technically daunting.