Deputy Minister Maciel Torres Outlines Energy Prosperity PlansThu, 07/18/2019 - 10:01
Just one day after the publication of the eagerly awaited PEMEX Business Plan, Miguel Ángel Maciel Torres, Deputy Minister of Hydrocarbons at the Ministry of Energy, opened Mexico Oil & Gas Summit 2019 on Wednesday at the Mexico City Sheraton María Isabel Hotel.
In his presentation, titled The New Government’s Energy Vision, Maciel Torres highlighted the challenges that face the new administration in delivering affordable energy solutions and future energy prosperity to the country, while securing the health of PEMEX, currently the world’s most indebted oil major.
Maciel Torres began by outlining the steep fall in Mexico’s oil production, which he said was due to the way investment had unevenly risen and fallen throughout the last several decades. This situation, he said, has not been sufficient for the needs of the country. In December 2018, Mexico produced 214Mb/d of gasoline while imports reached 603Mb/d to supply the national demand of 791Mb/d.
According to Maciel Torres, the government is working to resolve this. “Investment into exploration has risen to 30 percent of the federal budget from 15 percent, which has helped us replenish our production reserves,” he said.
He also underlined the need for Mexico to move away from relying on foreign nations, particularly in the area of national gas, saying that “high dependence on any foreign market could be catastrophic.” To ensure that populations in diverse areas of the country have sound access to fuels, Maciel Torres said that strengthening Mexico’s national pipeline network would be a focal point of the government in the coming years. Private companies would be involved in this development, he added. “Areas that are lacking in infrastructure, including Oaxaca, the Baja California Peninsula and the southeast of the country, will be a center for pipeline development.”
Speaking just a day after the launch of PEMEX’s Business Plan, Maciel Torres said what was published yesterday was “only a fragment of the 100-page document.” The plan, which covers the first four years of President Andrés Manuel López Obrador’s administration up to 2022, announced financial support of US$6.6 billion over the next two years. The government’s intention to reduce PEMEX’s financial burden, set to free up an additional US$7.2 billion across the next three years, was also announced.
Maciel Torres also spoke about hydraulic fracturing, better known as fracking, as a method that could be used to reach Mexico’s copious unconventional resources. While he did not dismiss the potential of fracking, Maciel Torres said the method was not part of Mexico’s current production plan. “To be clear: all of PEMEX’s cards are on conventional resources,” he said, adding that unconventional resources has not been ruled out entirely. “Unconventional investments are being contemplated.”
The Deputy Minister blamed the free market for preventing the government from lowering energy prices, but also pointed out that the administration had successful achieved a drop in fuel theft. In 2019, PEMEX hopes to recuperate 80 percent of the MX$40 billion losses that theft inflicted the previous year, he said.
Maciel Torres also explained that the government is pushing the role of technology in Mexico’s energy sector. He said the country has six specialist institutions and two universities producing technological advances and “human capital of over 25,000 scientists that we are now taking advantage of.”