CRE Delays Ultra-Low Sulfur Diesel Adoption

CRE has delayed once more the adoption of Ultra-Low Sulfur Diesel (ULSD) for PEMEX, as SENER claims the NOC does not have the infrastructure to follow through with its adoption. Moreover, PEMEX reported on its contracts with MSMEs.

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CRE Extends Deadline for Ultra-Low Sulfur Diesel Compliance

CRE has extended PEMEX Transformación Industrial's deadline to comply with ULSD specifications as per NOM-016. Originally set for 2018, the new deadline is December 31, 2024. SENER cited PEMEX’s infrastructure limitations for the extension, as it cannot guarantee the availability of ULSD.

PEMEX Awarded US$1.51 Billion in Contracts to Small Businesses

PEMEX allocated contracts worth MX$25.77 billion (US$1.51 billion) to MSMEs in 2022. A significant portion, MX$8.624 billion (US$503.7 million), went to firms in Tabasco, Veracruz and Campeche, fostering economic growth in these regions. PEMEX is also supporting MSMEs through its Business Competitiveness Self-Assessment (ACE) program, aimed at enhancing companies’ capacity to secure contracts directly with the company.

COMENER Supports Development of Unconventional Deposits

The Mexican Council for Energy (COMENER) is advocating for the development of unconventional reserves in Mexico, including shale oil and gas resources, through techniques like fracking. Concerns about environmental impacts and regulations must be carefully addressed to balance economic benefits and environmental responsibilities, according to COMENER.

PEMEX Navigates Debt Challenges With Innovative Financing

PEMEX plans to refinance its debt maturities in 2024 by securing US$3 billion in revolving credit lines with banks, in addition to the US$8.2 billion from the federal government's 2024 budget. This move aims to reduce PEMEX's debt, contingent on spending cuts. The high-cost financing will be secured in a challenging market with elevated interest rates. The budgetary support and capital injections are crucial for PEMEX's liquidity amid its substantial debt obligations.

Mexico Expects 24% Drop in Oil Revenues for 2024

Mexico is expected to see a 24% drop in oil revenue in 2024 compared to this year, totaling MX$1.48 trillion (US$86.5 billion). Factors such as exchange rate fluctuations and lower hydrocarbon prices contribute to this decline.

Mexico Will Not Meet Its Oil Production Targets: SHCP

Mexico's crude oil production is likely to fall below the initial goal of 2MMb/d for the current presidential term. The Ministry of Finance and Public Credit (SHCP) projects current production at 1.944MMb/d and anticipates only a modest increase in the coming year. PEMEX is also unlikely to meet export targets set by the presidency, with an estimated 994 Mb/d to be sold abroad next year.

Mexico's Liquid Hydrocarbon Production Increases Sharply in July

In July, Mexico's national liquid hydrocarbon production averaged 1.92MMb/d, a 69Mb/d increase compared to the same month in 2022, with PEMEX accounting for 95% of total production at 1.81MMb/d. Private operators contributed 5% (104Mb/d). There are 6,964 producing wells in Mexico and the top producers include Maloob, Quesqui and Zaap.

Oil Prices on the Rise

Oil prices have surged to levels not seen in about 10 months, posing challenges for central banks dealing with inflation. Factors like OPEC production cuts, Russian oil strategy shifts and geopolitical tensions have driven prices higher. Some predict oil hitting US$100/b by year-end. Mexico's revenue expectations are impacted by these fluctuations.