Contract-approved Investments Stagnate

The National Hydrocarbons Commission (CNH) has reported that through September, this year the country saw contract-approved investments totaling US$42.56 billion, representing a mere 0.87 percent equivalent to US$368 million.

Operator investments in Mexico regarding exploration and production have stagnated in the last couple of months, going from US$41.86 billion in May to US$42.56 billion in the closing weeks of September, representing a1.68 percent increase. .

The Hydrocarbon Information System (SIH) reports that the vast majority of investments programmed are planned to take effect after 2025, totaling US$15.769 billion. In 2020, investments of over US$4.943 billion were approved, the majority of which are aimed at PEMEX migrations and in second bid projects in round one. For 2021, those investments approved have been for over US$4.412 billion for rounds 1.2 and 1.3.

Areas with the most investments, until September, are the Pokoch and Ichalkil wells with US$8 billion; Eni in the wells of Amoca, Miztón, and Teocalli for US$7.861 billion; and the Ek-Balam camp from PEMEX Exploración y Producción for US$7.652 billion.

Regarding PEMEX’s financials, Fernando Cruz, Director of Energy Kannbal Consulting said that although PEMEX has been able to maintain, stabilize, and slightly increase production, a success he attributes to the prioritization of strategic fields in shallow waters, there are still “significant challenges ahead that could have an impact on the overall situation of the oil and gas sector.”

Cruz said if PEMEX want to keep his grade afloat, which also includes  Mexico to a degree, federal support will have to be contained (although with the refurbishment of refineries all across the country and the construction of Dos Bocas, that seems unlikely in the near future). And, most importantly, PEMEX needs to rethink its relationship with the private sector, especially given that the state-owned cannot handle the future workload it may acquire; with investments slowing down in the last couple of months, it will remain to be seen whether or not PEMEX is able to adjust.