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Mexican oil regulator flags Pemex's 'worrying' performance this year

10/29/2020 | 05:07pm EST

MEXICO CITY, Oct 29 (Reuters) - The oil fields prioritized for development since 2019 by Petroleos Mexicanos have significantly underperformed the Mexican state oil company's targets, data from the national oil regulator (CNH) showed on Thursday.

Of 20 priority fields, 16 have executed investments - 13 of which are offshore in the southern Gulf of Mexico - and only 10 have completed wells through August.

Overall, just 18 of 62 planned wells have been completed, while only about a third of 51 billion pesos ($2.4 billion) in planned investment was executed by August, CNH data showed.

Pemex had expected to reach oil and condensate production of 184,000 barrels per day (bpd) in August from 11 of the fields. Instead, it has only managed about 84,000 bpd, the regulator said.

The government of President Andres Manuel Lopez Obrador said Pemex would develop 20 new fields annually through 2024 to try to reverse 15 years of declining crude output. Lopez Obrador has focused on boosting Pemex production, while canceling oil auctions open to all companies.

But the regulator has only been notified of one new Pemex field entering development this year, plus 17 others in 2019.

"The data is really worrying," CNH commissioner Hector Moriera said following a presentation.

CNH officials said Pemex's missed targets were partly due to pandemic-related problems with drilling rigs, as well as delayed wells expected to begin producing later this year.

A separate CNH analysis of Pemex's overall portfolio over the period showed additional underperformance over nearly 400 government-assigned fields. While Pemex planned to spend nearly 65 billion pesos on exploration, it spent less than a quarter of that.

Meanwhile, it has drilled only 13% of 634 development wells, spending about 30% of 288 billion pesos approved.

As a result, oil and condensate output of some 1.6 million bpd fell short by more than a quarter, the data showed. ($1 = 20.9210 Mexican pesos) (Reporting by David Alire Garcia; Editing by Marguerita Choy and Leslie Adler)

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
LONDON BRENT OIL -2.21% 47.72 Delayed Quote.-27.39%
WTI -1.67% 44.975 Delayed Quote.-26.98%
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