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Analysts have warned that Pemex is increas- ingly vulnerable to low oil prices, as the corona- virus (COVID-190 pandemic wipes out crude demand and sends markets tumbling.
US-based Fitch Ratings commented recently that Pemex appeared to be the “most vulnerable” among its peers in Latin America. It also said that the NOC might need more government support and higher revenue from its refining business to withstand the price slide.
In a call with analysts following the announcement of the results, Pemex’s chief financial officer Alberto Velazquez said the fall- out from the pandemic was “serious but tempo- rary.” According to local press reports, Velazquez said that the firm would “continue with the best operational and financial [plans] implemented since the beginning of this administration,” in reference to the government of President Andres Manuel Lopez Obrador, which assumed power in late 2018.
He also noted that the government had pro- vided a substantial financial backstop for the NOC.
Velazquez further stated that Pemex had stabilised crude oil and gas condensate produc- tion levels during the first quarter of the year. This is in line with data from Pemex, which has reported that its oil production increased by
4.1% year on year, reaching 1.745mn barrels per day (bpd) in the first quarter of 2020.
This upswing marked a welcome departure from long-term trends, the state-run firm said. “In this way, the growth trend in production is maintained, a situation that has not occurred for 14 years,” it commented.
Octavio Romero, the company’s CEO, has said that Pemex will prioritise its most profitable projects in order to help deal with the impact of falling crude oil prices. The NOC also intends to cut spending this year and will save around $217mn in contract costs and $27mn in admin- istrative costs..
Wintershall discovers oil
at two fields within Block 29
GERMANY’S Wintershall Dea reported ear- lier this week that crude oil had been found at two Repsol-operated fields within Block 29, an offshore licence area in the Salina section of the Sureste Basin.
In a statement, the company said Repsol and its partners made the discoveries during explo- ration drilling at the Polok and Chinwol fields. At the former, they drilled the Polok-1 well to a total depth of 2,620 metres and encountered more than 200 net metres of oil pay from two zones in the lower Miocene layers. At the latter, they drilled Chinwol-1 to a total depth of 1,850 metres and encountered 150 metres of net pay from three zones in the lower Pliocene strata.
Polok and Chinwol are the first discover- ies made at fields awarded to investors in 2018 during Mexico’s deepwater bidding round 2.4, Wintershall noted. The Polok find could open up a new play within the Salina Basin, it added.
The German company did not offer an esti- mate of the size of these two finds, but it did say that the reservoirs had “excellent petrophysical properties.” It added: “The licence partnership will work on potential appraisal measures and
development options for the Polok and Chinwol discoveries, taking into account current market conditions.”
Block 29 is close to the Zama oilfield (Image: Wintershall)
Pemex CFO Alberto Velazquez (Photo: El Economista)
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w w w . N E W S B A S E . c o m Week 18 07•May•2020
