(Adds minister meeting)
By David Alire Garcia and Adriana Barrera
MEXICO CITY, Dec 11 (Reuters) - Mexico said on Thursday itwould cap the number of shallow-water projects companies can bidfor as it set out initial contracts for the historic opening ofits oil and gas industry, but did not specify the share thegovernment will take.
Following a reform that ended Mexico's 75-year statemonopoly, officials unveiled details of the firstproduction-sharing contracts to an audience that includedexecutives from Chevron Corp and Exxon Mobil Corp.
The contracts are for 14 shallow-water exploration andproduction (E&P) blocks that will pay winning companies with ashare of the output from projects, which the governmentestimated would cost $20 per barrel on average to produce.
"For the first time, we're setting in motion public tendersin which both national and international companies can explorefor, and eventually extract, fossil fuel resources in shallowwaters," said Energy Minister Pedro Joaquin Coldwell.
Nine-tenths of the formula used to award the 25-yearcontracts will depend on the share of operating profits acompany offers the government, with the rest dictated by howmuch investment a company pledges.
Companies or consortia will be limited to bidding on up tofive shallow-water areas, and will have to show a track recordin offshore projects. No company can join more than oneconsortium in the first round, the government said.
Fabio Ortega, the top executive in Mexico for Colombia'spublicly traded, state-controlled oil company Ecopetrol SA, said the limits are not standard practice.
"We'll have to see how much of an impact these limitscreate," he said, adding the bidding terms were otherwise inline with international standards, and that Ecopetrol isinterested in the entire package.
Juan Carlos Zepeda, head of the regulator that manages theprocess, the National Hydrocarbons Commission, said the limitsare geared towards promoting competition among companies.
Those seeking to participate in the tenders must haveoperated at least one offshore E&P project or have investmentsin them worth at least $1 billion.
Prospective bidders must also have either operated at leastone offshore E&P project or been a partner in at least twowithin the last five years.
The government, which hopes its reform will reverse a 30percent slide in crude output over the past decade, saidcompanies can recover up to 60 percent of their production costsprovided they make a commercial discovery.
Coldwell said on national radio on Thursday that U.S.,Mexican and Canadian energy ministers would meet businessmenfrom all three countries on Monday to discuss investment andpartnership possibilities in the sector. (Additional reporting by Christine Murray Gabriel Stargardterand Alexandra Alper, Editing by Simon Gardner, Marguerita Choy,Andre Grenon and Himani Sarkar)