Another eventful week for Mexico’s oil and gas industry, as CNH cancels farmouts and PEMEX announces plans to offer new fields to the private sector. In international news, two tankers are attacked in the Gulf of Oman, pushing up prices worldwide.
For all this and more, read on!
Check out the Interview of the Week with Carlos Palavicini Regional Manager Latin America of Petrolink, where we discussed the company’s industry-leading use of real-time data analytics to improve well management for industry players. See it here!
CNH Cancels Farmouts
CNH has announced the cancellation of farmouts for seven onshore areas. The farmouts, which had been suspended twice, were officially canceled after PEMEX and SENER withdrew the onshore sites from auction.
The farmouts were supposed to aid PEMEX in reversing the falling oil production that has hampered the NOC for the last decade. Players from the private sector had hoped they could apply their advanced technical knowledge and tools to help recover oil production, especially in lower-yielding mature fields onshore.
PEMEX to Offer 148 New Fields to Private Players
PEMEX this week announced its plans to offer the drilling and development of 148 oil fields to private players, to take place between 2020 and 2024. The NOC will sign off on these developments as part of its strategy to rejuvenate Mexico’s stumbling oil production. PEMEX hopes that the private involvement in these new fields will increase production by 36 percent by 2024.
According to El Universal, this new decision is part of the government’s wider plan to see the drilling of 491 wells, the development of 108 offshore platforms, and the construction of 4,474km of pipeline up to 2026.
Private Gas Station Numbers Climb
CRE figures show that the number of non-PEMEX gas stations have continued to grow this year, with private companies accounting for 30 percent of the national stations available.
The number of non-PEMEX stations has doubled in the past two years, with market leaders BP and OxxoGas both owning 450 gas stations. Of the 69 brands that now sell gasoline to consumers, 48 are Mexican.
AMLO Agrees Greater Private Investment
Mexican President Andrés Manuel López Obrador signed an agreement with Mexico’s Consejo Coordinador Empresarial (CCE) to increase its investment into Mexico by US$35 billion over the next two years. Members of the CCE already account for 20 percent of Mexican GDP but with the new Agreement to Promote Investment and Inclusive Development, its investment will rise to 25 percent of GDP.
Among the priorities of the agreement are reducing levels of corruption within PEMEX and CFE, and promoting PPPs to increase Mexico’s oil and energy production.
Shell to Invest up to US$1.3 Billion in Mexico
Shell announced plans to invest up to US$1.3 billion to explore and develop its four assets in the Mexican Gulf, three of which are in the Salina Basin while the other is in the Perdido Ford Basin.
BHP Hires Oceaneering for Geotechnical Services
Oceaneering has been contracted to carry out an Autonomous Underwater Vehicle (AUV) survey by major Australian company BHP Billington on its Trion block. This is the first time an AUV survey has taken place in Mexican waters and demonstrates BHP’s optimism for the block. At the start of 2019, the company announced a discovery from its Trion-2DEL well.
Oil Prices Rise in Line with Tensions in the Middle East
An attack on two oil tankers in the Strait of Hormuz, in the Gulf of Oman, resulted in oil prices rising 2.45 percent this past week. Prices had initially surged 4.5 percent before falling back. In the past week, the US military released a video purporting to show an Iranian military patrol boat removing an object that it claims was an unexploded limpet mine from the hull of one of the two oil tankers attacked. Iran denies any role in the attack, which comes around a month after four other tankers were damaged by torpedoes in the same stretch of water, one of the world’s busiest marine trade routes.
Oil Services Company Oro Negro Files for Bankruptcy
The Mexican company, Oro Negro, which has supplied services and platforms for PEMEX and other players in Mexico, filed for bankruptcy on Friday.
Oro Negro, which was founded by Gonzalo Gil White and José Antonio Cañedo, will now sell its assets to pay its debts.