Deep-water crude represents the future for Mexico´s oil industry, Calderón said Friday at the inauguration of a US$250 million oil platform in the Gulf of Mexico. Pemex needs technology agreements with experienced companies to tap those deep-water deposits, he said.

"This opens the possibility of obtaining technological knowledge for drilling and development in deep and ultra-deep waters as well as exploitation of heavy- crude fields," Calderón said, referring to the Petrobras accord.

Pemex is betting crude oil in Gulf waters at depths of more than 500 meters will compensate in the long-term for the decline in Cantarell, its largest oil field.

Last year, Cantarell output (55 percent of Mexico´s average oil production of 3.26 million barrels per day) fell 12 percent, and this year, it´s expected to decline at least 15 percent.

Mexico has prospective crude deposits in the Gulf of Mexico of 29.5 billion barrels, Calderón said. That´s less than the 54 billion barrels Fox administration officials had said may be found in deep waters. Calderón reiterated that Pemex won´t be privatized and will remain a state-owned company.

Energy Secretary Georgina Kessel echoed Calderón´s call for forming technological association with foreign companies, saying deep-water projects take eight to 10 years to develop and require much more investment than Mexico´s typical offshore oil fields.

Wells at Cantarell, which has produced about 1.2 million barrels a day since 1979, are drilled in waters about 60 meters deep. Most of Mexico´s oil deposits in the Gulf of Mexico are in waters deeper than 1,500 meters, Kessel said.

"Exploration of wells at these levels requires technical capabilities that allow us to evaluate oil resources in these areas," she said in a speech on the platform in the Ku offshore oil field. "It´s to our benefit to carry out technological associations with companies with proven experience in this field."

For the short term, Pemex plans to make up for the drop in Cantarell with production from a group of fields called Ku, Maloob and Zaap. Production in these fields is expected to jump to 800,000 barrels per day by 2009 from 500,000 barrels now, Pemex said. The crude at these fields is much heavier than the Maya sour crude produced at Cantarell and needs to be mixed with higher- priced light crude to bring it up to the Maya standards.

Pemex, the world´s third- largest crude producer by volume, also is working to prolong the life of Cantarell by drilling horizontally and pumping nitrogen in wells to increase pressure. The company is experimenting with injecting the natural gas it finds back into a well to lift oil production, a process that´s less expensive than using nitrogen.

Calderón said he wants to step up investment in natural gas to make Mexico self-sufficient.

Mexico now imports about a quarter of its natural gas needs.