Page 6 - LatAmOil Week 27 2022

LatAmOil MEXICO LatAmOil

Pemex signs LoI with NFE on

Lakach deepwater gas project

MEXICO’S national oil company (NOC) Pemex production might begin at the field. However,
is set to resume work on the Lakach natural gas Romero stated on July 1 that the additional
field after a hiatus of more than six years under funds would allow Lakach to come on stream
a letter of intent (LoI) signed with its US-based next year. “With the collaboration of the entities
partner New Fortress Energy (NFE). and regulatory bodies of the federal govern-
Pemex’s CEO Octavio Romero Oropeza ment, this project will finally start production in
announced the signing of the LoI on July 1. He July 2023, and in this way the investment made
did not reveal full details of the document, but will be recovered,” he said.
he did say that the NOC and its partner had The Pemex chief also blamed previous gov-
agreed to invest $1.5bn in the Lakach project, in ernments for the long delays in the develop-
addition to the $1.4bn that Pemex already spent ment of the deepwater field. He described the
there before suspending work. project as one of many “pending issues left by
For its part, NFE issued a statement con- past administrations” on which large amounts
firming Pemex’s announcement on July 5 and of money had been spent with “null results.”
revealed some details of the deal. It said it had Lakach was discovered in 2007. It lies off
agreed to complete seven offshore wells at Lak- the coast of Veracruz State in 988-metre-deep
ach over the next two years and would also water and may eventually yield 400mn cubic feet
deliver a 1.4mn tonne per year (tpy) floating (11.3mn cubic metres) per day of gas.
LNG (FLNG) unit to the field. The FLNG ves- Pemex initially sought to develop the field
sel will liquefy most of the gas extracted from on its own. However, it encountered many chal-
Lakach, leaving the remaining volumes, along lenges, as it had no direct experience working in
with any gas condensate production, available deepwater environments and was not working
for utilisation at Pemex’s onshore facilities, it with a foreign partner. As a result, when Pemex
explained. sought to rein in upstream spending in 2016, it
“NFE and Pemex believe the Lakach field was included on a list of fields where upstream
will yield approximately 10 years of production, operations were to be halted.
with the possibility of significantly extending Meanwhile, the NOC’s management deter-
the reserve life if nearby fields are developed,” mined that the project was unlikely to succeed
it added, referring to two sites known as Kunah without assistance from an outside investor, but
and Piklis. NFE explained that these two sites it did not make the decision to seek a partner
made Lakach a more attractive prospect, as until last year.
they hold around 2.3 trillion cubic feet (65.13bn Romero announced the company’s plans
cubic metres) of gas in addition to Lakach’s 1 in December, saying that Pemex was looking
trillion cubic feet (28.3bn cubic metres) of gas to establish an “association with private sector
in proven and probable reserves. firms” and expected to “be able to recoup not all
The NFE statement did not say exactly when but most of its initial investment.” ™

Lakach may be developed together with two nearby fields, Kunah and Piklis (Photo: Schlumberger)

P6 www. NEWSBASE .com Week 26 30•June•2022