Page 11 - LatAmOil Week 36

LatAmOil MEXICO LatAmOil

AMEXHI head: Mexico’s new oil and gas

plan not likely to favour private sector

THE Mexican government is gearing up to The NOC said in March that it intended to
release a new plan for boosting the energy sector reduce its administrative expenses and contracts
within the next few weeks, but its programme is this year in order to help mitigate the impact of
unlikely to include any new exploration or pro- falling crude oil prices. It also said it would give
duction projects that would be open to private or priority to its most profitable projects going
foreign oil firms, according to the head of a local forward and make all necessary adjustments to
industry group. ensure that it remained financially stable in the
“We don’t expect that there will be anything face of the coronavirus (COVID-19) pandemic.
new in exploration and extraction in this infra- Pemex posted multi-billion-dollar losses
structure plan,” Merlin Cochran, the direc- in the first and second quarters of this year, as
tor-general of AMEXHI, said in an interview the COVID-19 pandemic led to a drastic drop
with Reuters last week. More specifically, he in global oil demand. The US-based ratings
said, the administration of Mexican President agency Fitch has described Pemex as the most
Andres Manuel Lopez Obrador is not likely to vulnerable of all NOCs in Latin America; it has
authorise any new joint venture partnerships for also said that the company may need more gov-
state-owned oil company Pemex. ernment support to withstand the slide in global
“Not in the short term,” said Cochran, who oil prices. ™
formerly served in Mexico’s Energy Ministry,
known locally as SENER.
Lopez Obrador, who assumed power in 2018,
has walked back efforts by his predecessor Enri-
que Peña Nieto to open up the country’s energy
sector to private producers. His government
decided to freeze farm-outs in his first year in
office, and it has cancelled seven tie-ups planned
for state-run Pemex in 2021.
The national oil company (NOC) currently
has just three tie-up projects in operation, and
all of them were given the green light by the
previous government. When they were author-
ised in 2013, they ended Pemex’s long-standing
monopoly on production and enabled Mexico
to hold its first-ever oilfield auctions. Mexico’s current government seeks to strengthen Pemex (Photo: Pemex)

Mexican oil production hits

record low of 1.6mn bpd in July

CRUDE oil output in Mexico hit a record low of 57,000 bpd, in July.
1.605mn barrels per day (bpd) in July, putting Mexico’s crude oil output has dropped by
the country on track to register its lowest oil pro- nearly 7% since the beginning of this year,
duction in nearly half a century. according to CNH data. This is partly in line
Data from the state oil and regulator, known with long-standing trends, as Pemex’s output
as CNH, show that Pemex extracted 1.548mn figures have been falling steadily since reaching
bpd in July. The national oil company (NOC) a peak in 2004. But this has also been driven by
thus accounted for about 96.45% of total pro- recent developments – namely, the coronavirus
duction, but it also reported its lowest monthly (COVID-19) pandemic, which cut into global
output figure since November 1979. energy demand, and the drop in oil prices.
Meanwhile, private oil companies accounted Industry observers have warned that Pemex
for the remaining 3.55% of production, or is increasingly vulnerable to low oil prices.

Week 35 03•September•2020 www. NEWSBASE .com P11