Español

 

Guyana


Trinidad
& Tobago




Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 


Mexico's Pemex closes year of missed targets

Reuters

Mexico's president's plans for downstream revitalization also hinge on his upstream aims.

By Rebecca Conan / Platts

MEXICO CITY
Petroleumworld 31 12 2019

Mexican President Andres Manuel Lopez Obrador's pledges to put state-owned Pemex back at the center of policy have worried investors who had banked on joint public-private opportunities.

But operating statistics a little more than a year after the president took office show few signs of a revitalized state energy industry, despite increased budgets for upstream exploration and production (E&P) and slashing the company's heavy fiscal burden. Whether this will eventually open the way or force the government's hand for more private investment is unclear.

Crude output dropped by 1pc to 1.68mn b/d in November from 1.69mn b/d in December last year, a trend that analysts say will be difficult to turn around.

Lopez Obrador, an oil nationalist from Mexico's once booming oil state of Tabasco, wants Pemex to go it alone in increasing output. Just months after taking office, he cancelled all new avenues for private sector involvement in upstream auctions, farm-outs and contract migrations.

Pemex decided instead to focus on the development of 22 new onshore and shallow-water priority fields, recent discoveries that had yet to be put into development, in order to rapidly reverse a more than decade-long decline in crude output that would see production hit 1.78mn b/d by year-end and add 267,000 b/d by 2020.

The president's plans for downstream revitalization also hinge on his upstream aims. He wants domestic crude to fill the planned but controversial 340,000 b/d Dos Bocas refinery as well as lift utilization at the existing six refineries above 40pc, which will require completion of planned refinery maintenance.

But as of October, Pemex had only secured development plans for 17 of the crude fields, invested just 2pc of its allocated Ps25.8bn ($1.35bn) budget and drilled just one of 16 planned wells. Pemex has declined to comment on the reasons for the delays. But industry participants consulted by Argus say Pemex is up to six months behind on payments and some of the contractors hired for well drilling and infrastructure installation are inexperienced.

Unrealistic expectations

Pemex personnel changes over the last year E&P director Miguel Angel Lozada was banned last week from public office because of corruption following a year-long investigation, while a steep salary cut caused an exodus of engineering talent have also slowed progress.

Pemex's plans to test whether it has a shared reservoir with the Zama discovery the first and largest non-Pemex discovery since the 2014 energy reform are more than a year behind schedule because of delays in the installation of a drilling platform contracted last year.

Pemex is also behind on its plan to start development of up to 20 new fields each year, a strategy the company says will add at least 1.3bn bl of oil equivalent (boe) of reserves each year between 2019 and 2024 in order to reverse year-on-year declines in reserves.

Pemex has made just one discovery this year, the onshore Quesqui field in Tabasco state, that has 500mn boe.

"Developing 20 fields each year is completely unrealistic when in the past 19 years they have developed a total of 72 fields," Fausto Alvarez, former technical director of contract administration at oil regulator CNH said recently.

Pemex hopes to increase output to 2.6mn b/d by 2024 55pc higher than November's production level a target that ratings agencies, industry analysts and E&P experts say is impossible without private sector investment.

Independent progress

As Pemex has failed to hit its targets this year, independent operators have increased output to 47,000 b/d in November from 29,066 b/d in November last year, according the CNH.

"Next year, the important issues for the oil industry will be increased production, more discoveries and the unification agreement for Zama," Mexico's private oil industry association Amexhi said this week.

Independent operators expect to produce 75,000 b/d by year-end 2020, with three contracts alone Eni's block one, Hokchi Energy's Hokchi field and Fieldwood Energy's block four forecast to produce 46,000 b/d.

By 2024, independent operators hope to produce 280,000 b/d of crude.

The only avenue for private sector investment this year was integrated service contracts for the development of mature fields, with contracts to be tendered in November, according to Pemex's business plan.

A draft contract model put out to public consultation earlier this year received a lukewarm response and the tenders have yet to be launched. The government does plan to unveil a series of new energy projects, to be developed in association with the private sector, in January.



By Rebecca Conan from Argus Media.

argusmedia.com
12 30 2019

________________________


We invite you to join us as a sponsor.

Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.

________________________

Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.

Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1


 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher: Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2019, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2019, Petroleumworld   / Elio Ohep - All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.