Page 6 - LatAmOil Week 06 2021

LatAmOil MEXICO LatAmOil

Mexico’s finance minister hails

results of 2020 oil hedge deal

MEXICO’S Finance Minister Gabriel Yorio has per day in 2020, down by about 1.2% on the pre-
been talking up the results of last year’s oil hedge, vious year’s figure of 1.68mn bpd. These num-
saying that the deal had allowed the government bers are broadly representative of the country’s
to “compensate for 80% of the fall in income” overall performance, since Pemex and its joint
that it might have experienced as a result of ventures with foreign partners account for
declining crude prices. nearly all of Mexican crude production.
Because Mexico was able to lock prices in Last year marked the fourth time that the
at the above-market level of $49 per barrel, the hedge has been a net win for the government
minister said recently, it succeeded in raising an since it was instituted almost 20 years ago.
extra $2.38bn from oil sales in 2020. This helped According to Yorio, Mexico City intends to
insulate the country from the impact of the make the investment again in 2021. He did
coronavirus (COVID-19) pandemic, he said. not say how much would be spent on the deal,
Despite the pay-out, last year’s hedge didn’t which is one of the largest derivative transac-
provide the country with complete protection, tions arranged each year on Wall Street. Mexi-
the Financial Times noted. Mexico saw oil can authorities typically spend about $1bn per
revenues sink to a little less than MXP606bn annum on the hedge.
($30.4bn) last year, down by 38.7% on the 2019 This year’s deal may involve larger volumes of
figure of MXP956bn, it reported. oil, since Pemex has said it hopes to boost pro-
Declines were also noted in operational per- duction to 1.94mn bpd in 2021. The company
formance, as the national oil company (NOC) has not said how it will reach the goal, which
Pemex saw production sink to 1.66mn barrels would mark a 14% rise on 2020 output levels. ™

Pemex to close Tsimín oilfield in 2026

MEXICO’S national oil company (NOC) Pemex
has submitted a revised plan for the eventual
closure of Tsimín, an oilfield located in a shal-
low-water section of the Gulf of Mexico offshore
Campeche State, to the National Hydrocarbons
Commission (CNH).
In documents presented to CNH ear-
lier this week, Pemex noted that the field was
already mature. Output at Tsimín, also known
as A-3051-2M, peaked at 79,280 barrels per
day (bpd) of crude oil and 328mn cubic feet
(9.288mn cubic metres) per day of natural gas
in 2014 but has been declining ever since then,
it said. In 2020, it noted, the site yielded 11,700
bpd of oil and 60.41 mmcf (1.711 mcm) per day
of gas.
As such, Pemex said it hoped to keep Tsimín
on stream until 2026, even though its licence
was due to remain in force until 2034. By 2026,
it said, the field is likely to be yielding just 10% of
initial production volumes.
In the meantime, the NOC stated, the site is Tsimín lies off the coast of Campeche state (Image: Mexico Business News)
still known to contain 7.94mn barrels of oil and
40.58 mmcf (1.149 mcm) of gas in recoverable eight development wells online, it added.
reserves. The Tsimín oilfield was discovered in 2009,
To extract these volumes, Pemex will have via the drilling of a wildcat well. It began pro-
to invest about $392.9mn in the field and keep duction in 2012.

P6 www. NEWSBASE .com Week 06 11•February•2021