Exhibit 10.40

                          AMENDMENT NO. 1 TO TITLE XI
                      RESERVE FUND AND FINANCIAL AGREEMENT
                      ------------------------------------


This Amendment No. 1 to the Title XI Reserve Fund and Financial Agreement
("Amendment No. 1") dated as of January 21, 2000 between Perforadora Central
S.A. de C.V., a Mexican corporation (the "Shipowner") and the United States of
America, represented by the Secretary of Transportation, acting by and through
the Maritime Administrator (the "Secretary"), pursuant to the provisions of
Title XI of the Merchant Marine Act, 1936 as amended.



RECITALS:


A.       The Shipowner and the Secretary entered into the Title XI Reserve Fund
         and Financial Agreement dated November 5, 1998 (the "Initial
         Agreement"), in connection with the financing of the TONALA, a
         LeTourneau Design Super 116C Jack-Up Drilling Unit (the "Vessel"),
         which had not been delivered as of the date of said Initial Agreement;

B.       On the date hereof, the Shipowner has accepted delivery of the Vessel,
         said Vessel being named TONALA; and

C.       The Shipowner and the Secretary desire to amend the Initial Agreement
         to reflect (i) the delivery of the Vessel, by adding the TONALA to
         Exhibit "A" of the Initial Agreement; (ii) the cumulative Net Worth of
         the Shipowner; (iii) the mimimum equity investment of the Shipowner as
         of the delivery of the Vessel; and (iv) certain changes to the
         requirements of Section 9(a).

         NOW, THEREFORE, in consideration of the premises, the mutual
conveyance herein contained, and of other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company and the
Secretary agree as follows:

1.       Attachment A is hereby amended to add the TONALA thereto.

2.       Attachment A is also amended to reflect the cumulative Net Worth and
         minimum required equity investment of the Shipowner, as set forth
         therein.

3.       Section 9(a) of the Title XI Reserve Fund and Financial Agreement is
         hereby amended to delete the words "M.A. Form 172" wherever it appears
         thereon, and to substitute therefore the words "financial statements
         and reports produced and used in the ordinary course of the Company's
         business, including a balance sheet and income statement, submitted
         both in Mexican pesos following Mexican GAAP (Generally Accepted
         Accounting Practices) and converted to U.S. dollars and U.S. GAAP.


<PAGE>




4.       Capitalized terms used here and not defined herein have the meanings
         described thereto in the Initial Agreement .

5.       Notwithstanding any provision herein, in the event there are any
         inconsistencies between the original of this document held by the
         Secretary and the same as held by any other party hereto, the
         provisions of the original of this document held by the Secretary
         shall prevail.

6.       Except as specifically amended hereby, all of the conditions and
         provisions of the Initial Agreement shall remain in full force and
         effect and each such term and provision is hereby ratified and
         confirmed.

7.       This Amendment No. 1 may be executed in any number of counterparts.
         Each of said counterparts shall be deemed to be an original, but all
         of such counterparts shall constitute but one and the same instrument.

         IN WITNESS WHEREOF, this Amendment No. 1 has been executed by the
Company on January 21, 2000, and by the Secretary on January 21, 2000,
effective as of the date first above written.


                                            PERFORADORA CENTRAL S.A. DE C.V.



                                            BY:   /s/ PATRICIO ALVAREZ MORPHY
                                               -------------------------------
                                                   PATRICIO ALVAREZ MORPHY,
                                                   PRESIDENT
ATTEST



/s/ JORGE VILLAPANDO BORREGO
--------------------------------------
JORGE VILLALPANDO BORREGO
VICE PRESIDENT AND ASSISTANT SECRETARY

                                            UNITED STATES OF AMERICA
                                            SECRETARY OF TRANSPORTATION

                                            BY:  MARITIME ADMINISTRATOR


                                            BY:   /s/ JOEL C. RICHARD
                                               --------------------------------
                                               SECRETARY,
                                               MARITIME ADMINISTRATION
[SEAL]

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<PAGE>

                            ATTACHMENT A TO TITLE XI
                      RESERVE FUND AND FINANCIAL AGREEMENT


(Contract No. MA-13452)

1.    This Title XI Reserve Fund and Financial Agreement shall apply to the
Shipowner's Vessel named TONALA, I.M.O. No. 8764523, HP-9700.







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