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Weekly Roundups

CNH President Steps Down; Private Deepwater Exploration Picks Up

By Conal Quinn | Wed, 09/14/2022 - 18:01

Among this week’s top stories, CNH President, Rogelio Hernández Cázares, has decided to resign his post just two years into a seven-year term in the wake of some high-profile skirmishes with the government over permitting delays to fields prioritized by PEMEX. Elsewhere, both Murphy Oil and Shell have reaffirmed their commitment to deepwater exploration projects in the Gulf of Mexico, while Valero Energy enters talks with the government over falsified fuel import invoices.

 

Ready for more? Here is this week in oil and gas!

 

Mexico:

CNH President Resigns His Post

CNH President, Rogelio Hernández Cázares, has stepped down from the position just two years into a seven-year term. In response, President López Obrador has proposed a shortlist of three candidates to be presented before the Senate, including Agustín Díaz Lastra, a PEMEX Board Member and economist by profession who has held various public roles in his home state of Tabasco, Romeo Antonio Rojas, an engineer who has worked on extra heavy crude projects and currently serves as PEMEX's Deputy Head of Strategic Projects and José Sánchez Pérez, Chief Administrator of the Tehuantepec Isthmus corridor project with a background in economics.

 

PEMEX Supports Cuban Reconstruction Efforts

PEMEX has offered technical and financial support to Cuba for the reconstruction of an oil storage terminal that was destroyed in an early August fire. The inferno, caused when lightning struck the supertanker port in Matanzas during a tropical storm, killed 14 firefighters, injured a further 130 people and caused untold destruction to Cuba’s already crippled energy sector.

 

Shell Contracts Maersk’s Ultra-Deepwater Drillship

Shell has extended a drillship contract with Danish shipping company Maersk Drilling for use in upcoming projects in Mexico. The offshore drilling contractor secured the contract extension with the Anglo-Dutch oil major for the Maersk Voyager, a seventh-generation drillship currently deployed at another Shell deepwater drilling campaign in Suriname.

 

Murphy To Spud Deepwater Well in Salina Basin

Murphy Oil is preparing to commence drilling the deepwater Tulum-1EXP, where it hopes to locate resources of 62.24MMboe off the coast of Veracruz. The US IOC’s Mexican subsidiary, Murphy Sur, received authorization from CNH earlier this year and was expected to begin spudding by August. Murphy Oil CEO Roger Jenkins assured analysts this month that the well “should be spud by October.” It is unclear why the original August spudding target was not met.

 

Valero Holds Talks With Mexico Over Inflated Gasoline Import Invoices

President López Obrador confirmed Monday that the government has initiated talks with US firm Valero Energy over reports concerning inflated invoices for fuel imports. US Secretary of State Antony Blinken led a delegation to discuss ongoing trade disputes between US-based companies and the Mexican government. For his part, López Obrador described the talks as both “productive and amiable,” adding, however, that if U.S. companies are found to have been involved in fuel smuggling they will face harsh penalties. Valero has claimed it was unaware of the fraudulent import and sales documents and insists it is not subject to an investigation. Instead, the falsified invoices are believed to have been forged by third parties.

 

Field Spotlight: Zama

In July 2017, Houston-based E&P company Talos Energy became the first private player to strike oil in Mexico for over seven decades with the discovery of the shallow-water Zama field in the Southeast basin, 60km off the coast of Tabasco. The 800MMboe discovery is one of the Top 10 biggest finds in Mexico’s history and is considered one of the most promising shallow water fields in the world today. Soon after, however, it was discovered that the reservoir extended into the adjacent Uchukil block, operated by PEMEX. When the two sides failed to reach an agreement on who should operate Zama, SENER intervened to settle the first unitization case between PEMEX and a private operator, appointing the NOC as the sole operator in July 2021.

 

Industry Leaders to Gather at Mexico Oil & Gas Summit 2022

Mexico’s oil and gas industry is one of the key drivers of the country’s economy. Since the beginning of his administration, President López Obrador pledged to make its development a priority. At this year’s Mexico Oil & Gas summit, industry leaders will meet to discuss some of the key events of the past year, as well as some of the biggest projects set to take place over the next 12 months. 

 

International:

Global Oil and Gas Exploration Shrinks As Companies Shift Focus To Lower-risk Core Assets And Regions

Global oil and gas exploration is set to falter this year as the number of licensed blocks and total acreage fall to near all-time lows as the sector struggles to shake off the effects of the COVID-19 pandemic and the ensuing oil market crash, Rystad Energy research shows. Only 21 lease rounds were completed globally through August this year, half of the 42 rounds held in the first eight months of 2021. The acreage awarded so far this year has shrunk to a 20-year low of 320,000km². Global lease rounds are expected to total 44 this year, 14 less than in 2021 and the lowest level since 2000.

UK Lifts Shale Gas Fracking Ban in Bid to Boost Fuel Supply

New PM Liz Truss removed a moratorium on so-called fracking as part of a package of measures to tackle soaring energy prices that are hammering households and businesses. Even with the renewed government support, the shale gas industry still faces an uncertain road, with significant opposition from local communities and challenges related to the country’s geology. 

Saudi August Oil Output Hit 11MMb/d

Saudi Arabia told OPEC that it raised its crude production to just over 11MMb/d in August, exceeding the symbolic level for the first time in two years as the kingdom fulfilled a pledge to stabilize world markets.

Kazakhstan readies massive oil and gas offering

Kazakhstan has unveiled a plan to reallocate or sell 107 exploration and development licenses for oil and gas blocks, including 23 to be made available exclusively to a pair of state-run companies.

Photo by:   @CNH_MX
Conal Quinn Conal Quinn Journalist & Industry Analyst