Page 11 - LatAmOil Week 48 2020

LatAmOil MEXICO LatAmOil

Mexican oil output drops

for second month in a row

MEXICO’S crude oil production dropped for In response, its leaders have pledged to prioritise
the second consecutive month in October to its most profitable projects in order to generate
a level only marginally above the record lows more revenue and pay down debts. Even so,
recorded over the summer, raising concerns analysts are still concerned that the firm has not
about state-run oil firm Pemex’s ambitious taken adequate measures to deal with the fallout
targets. from the global pandemic.
According to the National Hydrocarbons In the meantime, Mexican President Andres
Commission (CNH), oil output averaged Manuel Lopez Obrador has continued to insist
1.627mn barrels per day in October, down from that Pemex can not only recover but help fuel
1.644mn bpd in September. PEP, the exploration Mexico’s economic growth. Earlier this year, he
and production arm of the national oil company said that the country was on track to increase
(NOC) Pemex, accounted for 97% of total, and domestic refining capacity and would continue
private players made up the rest, the regulator to construct a new refinery while also upgrad-
said. ing existing facilities. The president has also said
Mexican crude yields dropped significantly that construction work on Pemex’s new $8bn
in the three-month period between May and Dos Bocas refinery project will not be post-
July and have not yet recovered. In July, output poned or cancelled, despite questions about the
hit a record low of 1.605mn bpd, and CNH data cost and viability of the project. ™
indicated that it was heading towards the low-
est levels recorded since the 1970s. Pemex, for
its part, extracted just 1.548mn bpd in July, the
lowest monthly figure reported since November
1979.
Pemex has suffered significantly as a result of
the coronavirus (COVID-19) pandemic, which
has wiped out global energy demand and sent oil
prices tumbling. Indeed, a number of industry
analysts believe that the company may be more
vulnerable than its counterparts in other Latin
American countries.
The company’s management team has
brushed off such observations. Pemex’s CFO
Alberto Velazquez said in May, for example, that
the fallout from the pandemic was “serious but
temporary.”
The state-run firm has seen its production
steadily decline since reaching a peak in 2004. Velazquez claims damage from the pandemic is temporary (Photo: El Economista)

Pemex exec asked to resign

over profit-sharing payments

A representative of PMI, the trading arm of Dominguez, PMI’s director of administration,
Mexico’s national oil company (NOC) Pemex, was now expected to step down. He also said
has been asked to resign after authorising pay- that another employee had already resigned
ments under a profit-sharing plan, according to under pressure to return the payments.
a Bloomberg report. Pemex informed Cardenas Dominguez ear-
A person familiar with the matter told the lier this year that it preferred to see PMI employ-
news agency last week that Jose Luis Cardenas ees decline profit-sharing payments.

Week 48 03•December•2020 www. NEWSBASE .com P11