Accompanied by Tabasco’s Governor-elect, Adán Augusto López, incoming Minister of Energy, Rocío Nahle and incoming PEMEX Director General, Octavio Romero, President-elect López Obrador (AMLO) held a press conference in Tabasco’s Hilton hotel. This took place after a private meeting with different oil and gas players to address the challenges the industry will be facing during the new administration’s term.
During the meeting, AMLO and company representatives from Tamaulipas, Campeche, Nuevo Leon, Veracruz and Tabasco laid the groundwork for a joint plan to revamp Mexico’s oil production and established the bases for future oil and gas service tenders. The President-elect clarified his transition team was not preparing a licensing round, but instead preparing service tenders for PEMEX for the first days of December 2018. “Our plan to reactivate oil production will be oriented toward producing oil across the entire nation’s reserves. Public investments will be primarily focused on oil production in the blocks that are part of PEMEX’s E&P portfolio. Contracts and agreements with private companies that have a longstanding working relationship with PEMEX are required to drill new wells or to intervene in wells with some remaining recovery factors that can continue providing oil with secondary recovery techniques,” López Obrador said.
AMLO highlighted the halt in PEMEX’s oil platforms and drilling equipment. The NOC’s Institutional Database shows that from 2014 to 2018, its operational drilling equipment decreased from 106,451 units to 20,833, making the need to tackle PEMEX’s dormant oil production assets clear. Investment-wise, López Obrador stated his administration will include an additional MX$75 billion in the 2019 federal budget for production activities, allocate MX$55 billion for the first year of development of the Dos Bocas’ new refinery and MX$50 billion to revamp Mexico’s six operational refineries. “Our goal is to reach crude oil production of at least 2.6 million b/d by 2024,” he said.
For López Obrador, choosing a specific production goal at 2.6 million b/d that is lower than the country’s highest production point reached in 2004 with 3.38 million b/d is no accident. “We want to invest in renewable energy and avoid extracting too much oil as an inheritance for future generations. This specific production amount is what we calculate is needed as part of a rational management of a finite resource for Mexico to become self-sufficient,” said López Obrador.
AMLO also pointed out that his party’s candidates won in Veracruz and Tabasco, two of the country’s four key oil and gas states, meaning his administration will benefit from the full support of those states’ local administration to bring his oil and gas policy forward.