Eni Resumes Offshore Operations, PEMEX Posts Record ProfitsBy Conal Quinn | Wed, 05/04/2022 - 18:38
Among this week’s biggest stories, Italian IOC ENI resumes offshore operations in the Mexican gulf after a two-week halt, while PEMEX posts its highest quarterly profits in two decades with newly acquired Deer Park generating US$ 195 million for the NOC.
Here is this week in Oil and Gas!
After a two-week halt in operations, Italian oil giant Eni offloaded and exported its first crude oil shipment from the Miamte Floating Production Storage and Offloading (FPSO) vessel operating in Area 1. This marks a foundational step in the development of the Mexican oil and gas industry, as Eni is the first private company to develop a complex offshore project and to produce oil from it, now with the ability to export as well.
PEMEX reported its best financial quarterly results in 20 years, with a net profit of MX$122,494 million (US$6 billion) in 2022, which stands in sharp contrast with the net loss of MX$37,358 million (around US$2 billion) of 1Q21.
This is the largest net profit that the state-owned company has achieved since 1Q02, the last available registry of the company on the stock exchange. Octavio Romero Oropeza, Director General, PEMEX pointed toward high oil prices and increased demand for oil and its byproducts. Moreover, the recent acquisition of the Deer Park Refinery in Texas already generated US$ 195 million for the NOC.
The National Hydrocarbons Commission (CNH) authorized PEMEX to begin drilling at the onshore exploratory well Chucox-101EXP in Tabasco. The onshore well falls under the exploration plan already approved by the CNH through resolution CNH.E.06.005/2020 of Jan. 30, 2020, corresponding to assignment AE-0138-2M-Cuichapa. Meanwhile, Texas-based service provider Newpek has also been granted authorization from CNH this week to commence drilling at the Treviño-1EVA field in Tamaulipas, where the IOC expects to discover as much as 5.9MMb of crude oil.
The Corporate Direction of Administration and Services of PEMEX, together with the Coordination of Supply for Exploration and Production and the Contracting Management of Exploration and Production Services, have launched a new international public bidding process to assist the NOC with information gathering services. PEMEX also announced the launch of a new international bidding process this week for the construction of two offshore production facilities at the Mulach and Yaxche fields in the Gulf of Mexico.
If the government's decision to maintain fiscal stimuli for gasoline and diesel continues while international prices remain stable, research carried out by the BBVA suggests the outcome could be negative growth in the coming months. BBVA estimates that a 33.3 percent increase in the international price of gasoline would have an immediate impact on gasoline and diesel, with revenue falling at a quarterly rate of 72.8 percent.
The pandemic and the current government administration have not diminished the investment and growth potential of the oil and gas industry, but they have reshuffled where those opportunities can be found. While the most obvious openings for investment used to be focused on bidding rounds and the entrance of new operators into the market, the recentralization of PEMEX has resulted in a new focus on large upstream supply contracts and networks of service providers.
The government will make its decision in 3Q22.
Oil prices continue their upward trend on the back of supply chain issues caused by Russia’s invasion of Ukraine.