Page 7 - LatAmOil Week 01 2020

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Pemex’s plans to speed up drilling fall flat
MEXICO’S national oil company (NOC) Pemex has failed in its effort to accelerate drill- ing at 20 key fields in 2019 by using local service providers.
Data from the National Hydrocarbons Commission (CNH) show that contractors had only succeeded in bringing two of these sites on stream as of the end of November. As a result, the NOC will probably have to tender at least nine of its drilling contracts again, according to Borr Drilling, a US-based company that is work- ing to expand its Mexican portfolio.
Pemex executed the programme last year by awarding deals for the drilling of around 100 new wells to pre-selected service companies in a closed bidding process. It handed out the last of these contracts in May, saying that the deals would help boost the Mexican economy and facilitate the development of strategic assets.
Its hopes appear to have been ill-founded, said Pablo Medina, the vice-president of Welli- gence Energy Analytics.
Most of the service companies that won the drilling contracts deliberately low-balled their bids because they were in “survival mode” and wanted to ensure that they attracted a customer,
he told Bloomberg in the first week of January. Others did not have the expertise or the equip- ment needed to meet Pemex’s requirements, he added.
His remarks were echoed by Jorge Sierra, a senior analyst at Wood Mackenzie’s office in Mexico City. Sierra told Bloomberg that the Mexican service providers participating in the programme simply did not have the skills or resources needed to achieve the targets set by Pemex.
“They were supposing that they could bring these fields online quicker, but they haven’t,” he said. “The contractors that won the packages for drilling the priority fields haven’t had the expe- rience of managing integrated service contracts, like the big international ones such as Schlum- berger and Halliburton.”
According to Medina, the service companies that won the contracts are not likely to make much more progress this year. “[Pemex’s drilling plans] are already delayed by now, even without the fact that they’ll have to re-tender some of these packages,” he said. “There will be a reality check soon in 2020, when we see that produc- tion will likely keep declining.” ™
EL SALVADOR
Energía del Pacífico moving ahead with LNG project in El Salvador
US-BASED Invenergy has teamed up with sev- eral local investors – Grupa Calleja, Quantum Energy and VC Energy de Centroamerica – to form Energía del Pacífico (EDP), a venture that will carry out a gas-to-power project in El Sal- vador. The partners are working to establish the infrastructure facilities needed to allow EDP to import and regasify LNG so that it can serve as fuel for a thermal power plant (TPP).
According to EDP, the project is set to make significant progress this year. Late last month, the venture said it had wrapped up financing arrangements for the project, which will entail the deployment of a floating storage and re-gas- ification unit (FSRU), the construction of a 378- MW gas-fired TPP in the port of Acajutla, the installation of a 2-km subsea pipeline connect- ing the FSRU to onshore units and the building of a 44-km, 230-kV transmission line tying the TPP into the Central American Electrical Inter- connection System.
The scheme is set to cost about $1bn. It will
cover about 30% of El Salvador’s energy demand
and reduce the country’s dependence on dirtier
fuels such as diesel and residual fuel oil. 
An LNG import terminal is under construction (Photo: Energia de Salvador)
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