Another Oil Spill Occurs in Salina Cruz, Oaxaca

Locals reported four oil spills in 40 days in Salina Cruz, Oaxaca. In October, PEMEX implemented a program to hire fishers to clean the contaminated beaches as a way to support them amid various oil spills that undermined their livelihoods. The NOC agreed to hire 100 workers from each affected area indefinitely, although around 180 hold the positions currently. 

Ready for more? Here is the Week in Oil and Gas! 

PEMEX Abandons Plan to Fix Flaring Problem

At the end of 2016, PEMEX developed a plan to avoid accumulating fines for the excessive flaring of natural gas. The NOC reached an agreement with the CNH to invest more than US$3 billion to solve the problem. Five years later, PEMEX abandoned the project, and the environmental cost of the Ku-Maloob-Zaap cluster continues to increase. Low gas prices made it less attractive to process the resource and political priorities changed to increase oil production instead. The decision was taken despite the environmental question and threats from regulators to find the company.

Four Oil Spills in 40 Days in Salina Cruz, Oaxaca

On November 4, yet another oil spill was reported in Salina Cruz, Oaxaca. By April 2022, there were three reports of oil spills in Salina Cruz, seemingly the responsibility of PEMEX’s Antonio Dovalí Jaime refinery. This is the fourth oil spill reported over a period of 40 days by locals, who suspect that the spills are wastewater discharges from a PEMEX refinery stemming from an area where the NOC commonly discharges waste. 

Gasoline Subsidies Decrease

This week subsidies for Magna and Premium gasoline decreased to 89.92 percent. Diesel subsidies remain at 100 percent. In October, the finance ministry increased the amount paid for IEPS considering the rising inflation.

CNH Approves Uchukil Exploration; Repsol Abandons Various Blocks

CNH approved Repsol’s request to abandon three out of the six blocks the Spanish energy multinational holds in Mexico. “It is a business decision for Repsol, there is only one area with great discoveries, and it will focus on it,” said Alma América Porres Luna, Commissioner, CNH. CNH also enabled PEMEX to modify its exploration plan and carry out further exploration work in a shallow-water block off the coast of Tabasco. The Uchukil assignation represents part of the first unification process of a Mexican oil field.

PEMEX Reduces Investment in Ek-Balam

PEMEX requested modifications to the production schedule and investment of Ek-Balam. The NOC reported delays in the delivery of key infrastructure material, so CNH approved modifications to PEMEX’s development plan. Due to the delays, some activities, scheduled to finish in November 2022, will be finished by March 2023 instead. Another factor was the decrease in the investment projected for the period between October and December 2022. The investment designated to this field decreased by 9.1 percent.

Hokchi Energy Delays Drilling Plans

CNH approved Hokchi Energy’s changes to its Extraction Development Plan. The modification includes the rescheduling of various activities, mainly regarding drilling. As an alternative, Hokchi Energy presented a plan to maintain activity, adjust the volume of hydrocarbons to be recovered and modified its Natural Gas Exploitation Program (PAGNA).

EPA to Support PEMEX in Reducing Its Emissions

PEMEX announced a cooperation agreement with the Environmental Protection Agency (EPA). EPA will provide the NOC with diagnoses and economic analyses to support decision-making for oil and gas operations to reduce greenhouse gas emissions, specifically methane. EPA will also assist in developing and launching a mitigation plan to match the Global Methane Pledge. PEMEX will receive EPA’s recommendations on mitigation options.