Page 4 - LatAmOil Week 37 2022
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LatAmOil                                      COMMENTARY                                            LatAmOil

























                                                     Lakach may be developed together with two nearby fields, Kunah and Piklis (Image: Schlumberger)
       No quick start for





       Lakach gas project







       Pemex has said it hopes the deepwater natural gas field might start production

       as early as next year, but recent developments at CNH make this outcome unlikely



                         MEXICO’S national oil company (NOC) Pemex   prospect, as they held around 2.3 trillion cubic
                         reported earlier this year that it had teamed up   feet (65.13bn cubic metres) of gas in addition to
       WHAT:             with a US-based partner, New Fortress Energy   Lakach’s 1 tcf (28.3 bcm) of gas in proven and
       The CNH has been   (NFE), to develop Lakach, a deepwater natural   probable reserves.
       withholding approval of   gas field located off the coast of Veracruz State,
       Pemex’s development   and might be able to start production as early as   Still under discussion
       plan for the Lakach gas   next year.                   These are ambitious plans, but they are not set in
       field.              On balance, the announcement appeared to   stone yet. The deal announced at the beginning
                         be good news for Pemex. It marked a return to   of July was not a final agreement but a letter of
       WHY:              work at the Lakach field, a project that has been   intent (LoI) signed within the framework of a
       The commission has   on hold for more than six years due to technical   long-term strategic partnership.
       doubts about Pemex’s   and financial challenges. For another, it indi-  In other words, Pemex and NFE have yet to
       qualifications and plans   cated that the NOC might have found a way to   hash out all the provisions and conditions of the
       to work under a service
       contract.         achieve its aim of developing major hydrocar-  service contract under which the latter com-
                         bon deposits on its own, rather than bringing   pany will be working at the deepwater gas field.
       WHAT NEXT:        foreign partners on board and making them   Indeed, Reuters reported on September 13 that
       The resignation of a CNH   shareholders.               NFE had said it was still “working on the terms”
       member may clear obsta-  Moreover, it signalled that Mexico was on   of the deal with Pemex. The news agency also
       cles to approval, but not   the way to becoming a producer and not just   said that the NOC and the US-based firm had
       enough to enable a quick   an importer of LNG. As part of the deal, NFE   yet to decide how they intended to split the cost
       start to production.  agreed to deliver a 1.4mn tonne per year (tpy)   of development, drilling and infrastructure ini-
                         floating LNG (FLNG) unit to Lakach. It noted   tiatives at the field.
                         that Pemex intended to use the FLNG vessel to   It is not clear whether the parties have made
                         liquefy most of the gas extracted from the field,   any progress on this front since signing to the
                         leaving the remaining volumes, along with any   LoI in July. Pemex’s CEO Octavio Romero Oro-
                         gas condensate production, available for utilisa-  peza noted at the time that his company had
                         tion at its onshore facilities.      spent about $1.4bn at Lakach before suspend-
                           NFE also said in July that the partners would   ing work and added that the NOC and NFE had
                         be developing two more nearby gas fields, Kunah   agreed to invest another $1.5bn in the project.
                         and Piklis, along with Lakach. It explained that   However, he did not explain how expenses
                         these two sites made Lakach a more attractive   would be shared.



       P4                                       www. NEWSBASE .com                      Week 37   14•September•2022
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