AMEXHI Conference Explores Options Available to Private PlayersBy Pedro Alcalá | Thu, 04/29/2021 - 10:53
Rocio Nahle, Head of SENER, promised that the Ministry would respect the 111 exploration and production contracts signed with private operators despite the ongoing legislative challenges to the legal framework that governs other segments of the oil and gas value chain, as she stated at AMEXHI’s 2021 National Oil & Gas Convention, reports El Economista. The event, which took place on Tuesday and Wednesday, gave participants the opportunity to address the future of the industry’s private sector development.
AMEXHI leader and main host of the digital event, Merlin Cochran, also highlighted that federal authorities have recognized the legal rights of 34 major private operators (to read our latest interview with Cochran, click here).
Meanwhile, CNH Commissioner Héctor Moreira claimed that the E&P projects of private operators could contribute up to 704,000b/d to Mexico’s national production levels by 2030, reports BNAmericas. That year would represent a peak for all projects currently contracted. And, in order to maintain a constant increase in production levels in the years following that milestone, more bidding rounds will need to take place. Moreira went on to add that peak gas production is expected to be reached by 2028 under the current national portfolio of contractual development plans.
Moreira claims that a total of US$49 billion in investments is expected to be made in the Mexican oil and gas industry through its operators, both private and public, over the next 14 years, reports Forbes. The numbers are based on the investment and development plans approved by CNH. As Moreira put it, “We are expecting this money over the next 14 years. When I say expecting, I do not mean hoping, I mean that companies have explicitly committed to these volumes of investment in plans that we have already approved.” Moreira also noted that although the number of contracts that represent alliances between PEMEX and private operators is quite small, it is these contracts that will eventually represent the largest amount of investment and of added upstream productivity.
Ivan Romanovsky, VP for the Americas, Western Africa and Europe at Lukoil, suggested that Mexico could begin exploring unconventional resources more exhaustively to generate more extensive short term production increases, reports BNAmericas. Unconventional projects, and the hydraulic fracturing technologies that they sometimes require, are a difficult political subject in Mexico due to the risks associated with their application. However, Romanovsky claimed that companies such as Lukoil had the means and experience to apply these methods in the most environmentally safe way possible. CNH Commissioner Alma América Porres agreed with the potential of Mexican unconventional projects, claiming that 60 percent of the country’s prospective resources fall under this category. But, she also detailed that such a series of developments would be impossible without an intricate political strategy that could engage with the intense and organized opposition that such initiatives would invoke.