Monday , December 6 2021

Mexico targets a 50 percent jump in oil production under the "Pemex Rescue" by Reuters



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© Reuters. PHOTO PHOTO: The Pemex logo was depicted during the 80th anniversary of the expropriation of the Mexican oil industry at the headquarters of state-owned oil giant in Mexico City

By Dave Graham

Mexico aims to boost oil and gas production by almost 50 percent over the next six years, and in January will allocate infrastructure and drill contracts to develop 20 fields, the state noted the oil company Petroleum Mexicanos on Saturday.

Octavio Romero, CEO of the company, commonly known as Pemex, said the new government would increase prospecting investment by about 10 percent annually to return declining production when presenting a new industry plan.

President André Manuel Lopez Obrador, who took office on December 1, wants to revive Pemex, which has been heavily indebted, when crude production fell from the peak of almost 3.4 million barrels per day (bpd) in 2004 to less than 1.8 million in October.

"It's a new Pemex rescue," Lopez Obrador said in conjunction with Romero in the port of Ciudad del Carmen in the Gulf of Mexico just before his government was going to present his first budget with Pemex's economy under close scrutiny.

Under the plan, Mexican crude production is expected to amount to 2,624 million barrels of GDP by the end of 2024, while gas production also rises by about 50 percent.

The output will stabilize in the coming months and begin to pick up at the end of next year, said Pemex CEO. Forecasts presented in the government's first budget later on Saturday were suggested that production continued to fall until 2020.

Mexico's former government attempted to increase production by opening up production and prospecting to private capital. But the decline has not yet bottomed.

Lopez Obrador, an admirer of Lazaro Cardenas, the president who nationalized the Mexican oil industry 80 years ago, opposed the constitutional review of the industry 2013-14 conducted by his predecessor Enrique Pena Nieto.

The veteran left says he will respect 110 private oil contracts awarded under Pena Nieto, but this month urged the oil starters to start pumping oil quickly and offer them a three-year "truce" without giving further details.

Meanwhile, Mexico will accelerate the exploitation of 20 most offshore fields in the Gulf of Mexico, Romero said.

To this end, contracts for the necessary infrastructure will be awarded on January 15 and to drill wells on January 31, he added.

Most of the fields are offshore and the government is planning to issue "integrated" infrastructure agreements, Romero said. Drilling the wells would be "turnkey" contracts that made the companies or consortia responsible for delivery.

Pemex is responsible for the technology and monitoring of the services. By December 2019, the 20 fields should yield 73 000 bpd production, Romero said.

Energy Secretary Rocio Nahle told reporters in the city that priority should be given to Mexican companies in the contract process, based on a limited list of bids.

Romero said nine companies had expressed interest in drilling offshore wells, and five others had done that for the four lands. Everyone is the majority of Mexican owners, he said.

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