Guillermo Bilbao, energy and utilities expert at PA Consulting, comments on Mexico’s oil and gas sector.
The article notes that the federal Mexican government will raise its financial backing of Pemex significantly next year as it continues to eschew private investment. The Andres Manuel Lopez Obrador administration says it will allocate around $27bn to Pemex’s total budget for 2020—an increase of 8.8pc over the approved financial plan for 2019. In July, the company issued its Business Plan 2019-23 which pledged in 2020 to apportion around $14bn to E&P and c.$3bn for a new refinery to be built in the president’s home state of Tabasco.
Guillermo says: “In addition to the increase in resources, Mexican finance minister Arturo Herrera announced additional support for MXN$86bn ($4.41bn), of which MXN$46bn will come from fiscal support and MXN$40bn corresponds to direct capitalisation to the company.”
The priority for Pemex is to halt 15 consecutive years of crude production decline. Since output peaked in 2004 at 3.4mn bl/d, total national output has fallen by 46.4pc to just 1.6mn bl/d in 2018—an average annual drop of 112,000bl/d.
This year production has stabilised. First and second quarter output remained at around 1.6mn bl/d, although second quarter production dipped by 189,000bl/d, or 10.2pc compared with the same period in 2018. Most of this decline comprised of light and extra-light crude, contributing around 168,000bl/d, mainly due to water inflow at the Xanab field. The 2pc drop year-on-year in heavy oil output was caused by production fall from the mature offshore fields Ku, Maloob, Zaap and Akal.
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