Energy Sector Vital for Mexico’s Southeast, says Minister

You can watch the video of this presentation here.

The investment and business opportunities that the Energy Reform has provided Tabasco will be vital for developing the state and Mexico’s entire southeastern region, said José Antonio de la Vega, Minister for Energy Development for the State of Tabasco.

During the opening presentation of Mexico Oil & Gas Summit 2020, a two-day virtual event taking place on Wednesday and Thursday, the minister delivered a comprehensive insight into the ongoing developments taking place both onshore and off the coasts of Tabasco and explained that the state plays a vital role in Mexico’s oil and gas industry today.

“Tabasco is the land of opportunity for the energy sector,” said the minister. “As of today, 111 contracts have been awarded from the Energy Reform. Of these, 39 are located on land or in the waters of the state of Tabasco. That is to say, just over a third of all contracts awarded.”

As Mexico races to improve its production, propelled by President Andrés Manuel López Obrador’s promise to regain Mexico’s position as one of the world’s major oil production nations, Tabasco is making sure it plays its part. Though private production remains well below that of PEMEX for the time being, contractors with assets in the state are offering a huge contribution.

“In August 2020, production from private contracts reached 57,344b/d, of which 47,948b/d or 83.6 percent came from contracts in Tabasco,” Minister De la Vega explained. Eni’s Area 1 development, which became the first privately-held offshore field to reach production since the Energy Reform, is located in Tabasco’s waters. Also is the Zama field, discovered by US IOC Talos Energy, which will be unified between Talos and PEMEX. “This is the first time unification has happened in our country,” the minister said.

De la Vega noted that most success stories of the Energy Reform have taken place in Tabasco. Among the other major offshore players with interests in the state are Hokchi, Repsol and Shell. Hokchi, on the Hokchi field, began producing in May 2020, while Shell began drilling its first ultra-deepwater well, Chibu-EXP, in January of this year. It will reach over 6,700m in depth and is one of four ultra-deepwater wells Shell plans to drill this year. The company has committed to drill seven wells between 2020 and 2021 with approved investments of US$426 million.

On the public side, the Dos Bocas refinery remains the largest oil and gas project in Mexico. The refinery is located in Paraiso and is being built to bolster Mexico’s refining production, so crude will no longer have to be sent to the US for refining. Dos Bocas will have the capacity to refine 340MMboe/d and it is a key part of the government’s energy sovereignty plan.

“Following the completion of Phase 1, the Dos Bocas refinery is 24 percent complete and is scheduled for July 2022,” said the minister. He underlined the importance of the refinery to the state and said that the government’s decision to build in Tabasco would improve the opportunities and well-being of Tabasqueños. Both the refinery and private projects require an estimated 135,000 high-level experts, technicians and energy professionals, offering more job opportunities to the people of the state, and the southeastern region in general.

“We join the president to promote Mexico's development and to improve its people's lives,” the minister said.