FOR IMMEDIATE RELEASE July 31, 2008
Marianna Ohe (202-565-3200)
WASHINGTON, D.C.- U.S. companies large and small will sustain jobs at home while helping Mexico meet its domestic natural gas demand through the sale of oil and gas field equipment and services to Petroleos Mexicanos (Pemex), backed by $850 million in loan guarantees from the Export-Import Bank of the United States (Ex-Im Bank).
Ex-Im Bank approved a $150 million small business facility supporting Pemex's purchase of U.S. equipment and services to speed recovery of oil and gas reserves at Pemex's four major projects - Cantarell, Burgos Basin, the New Pidiregas Projects (NPP), and the Strategic Gas Program (PEG). Under the facility, Pemex already has contracted for $100 million in purchases, all of them from U.S. small businesses, and expects a significant share of the remaining $50 million to support contracts with small U.S. firms.
So far more than 60 small businesses scattered across the country are involved in contracts under the small business facility. They are located in states including California, Texas, Louisiana, Ohio, Illinois, Florida, Virginia New Jersey, Massachusetts and Vermont. The guaranteed lender on the transaction is JPMorgan Chase & Co., New York, N.Y.
One of our highest priorities is to expand the small business content of the export transactions we support, said Ex-Im Bank Chairman and President James A. Lambright. Mexico is Ex-Im Bank's largest market with a portfolio currently exceeding $7.4 billion, and Pemex is our largest customer. These Pemex transactions give us the opportunity to help keep Americans working and simultaneously meet Mexico's need for essential energy equipment.
Another $100 million Ex-Im Bank guarantee of a loan from ING (US) Capital LLC will support Pemex's purchase of U.S. equipment and services to expand the Burgos Basin natural gas development program. This includes geophysical equipment, the refurbishment of gas compressors, and drilling services and chemicals for approximately 260 development wells, 324 major and 600 minor workovers of existing wells, and drilling of 33 exploratory wells. Without the production expansion, Pemex would have to import larger quantities of gas to cover Mexico's current gas supply shortage.
More than half of the 73 U.S. exporters and suppliers on the Burgos Basin project are small businesses. Suppliers on the project are located in Texas, Oklahoma, California, Louisiana, Arizona, Washington, Wisconsin, Minnesota, Missouri, Illinois, Iowa, New York, Rhode Island and New Hampshire.
Ex-Im Bank also has guaranteed a $200 million loan from BNP Paribas, New York, N.Y., to support U.S. exports for PEG, which is made up of 20 separate program areas in and offshore from the Mexican states of Veracruz, Tabasco, Tamaulipas, Ciapas and Campeche. PEG was initiated by Pemex in the 1990s to help meet the increasing domestic demand for natural gas. Today the program accounts for nearly half of the country's natural gas output.
In addition, a $400 million Ex-Im Bank guarantee of a loan from BNP Paribas is financing Pemex's purchase of U.S. oil and gas field equipment and services for the NPP, 17 natural gas and crude oil exploration sites located on and off shore near the Bay of Campeche. The goal is to increase NPP's production capacity to 1.9 million barrels of oil per day, and 2.2 billion cubic feet of gas per day by 2012. Approximately 30 U.S. suppliers, mainly from Texas but also from Oklahoma, California, Louisiana, Wisconsin, Illinois and New York, are participating in the project.
Small businesses have participated significantly in nearly all Ex-Im Bank-supported export transactions with Pemex for its four primary projects. In late 2006, a $100 million facility was approved exclusively for small business exports.
In another unrelated small business transaction, Ex-Im Bank approved the extension of an insurance policy covering a $15 million revolving credit facility from Wells Fargo HSBC Trade Bank. The facility supports the purchase of rice from The Rice Company, Roseville, Calif., and other U.S. suppliers, by Industrializadora de Productos Agricolas de la Cuenca del Papaloapan, S.A. de C.V., La Granga, Veracruz, Mexico. The exporters under the transaction are 100 percent U.S. small businesses.
Ex-Im Bank is the official export-credit agency of the United States. The independent, self-sustaining federal agency, now in its 74th year, helps create and maintain U.S. jobs by financing the sale of U.S. exports, primarily to emerging markets throughout the world, by providing loan guarantees, export-credit insurance and direct loans. In fiscal year 2007, Ex-Im Bank authorized $12.6 billion in financing to support an estimated $16 billion of U.S. exports worldwide. For more information, visit www.exim.gov.
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Editors note: If you are interested in obtaining the names and locations of the expected exporters and suppliers on the transactions discussed in this news release, please call Marianna Ohe at 202-565-3200.