Mexico Retains Oil Hedge Size Despite Planned Export Stop

Mexico aims to stop exporting crude oil entirely, though the country’s oil hedge suggests it is not ready to do so. Analysts worry Dos Bocas will not be completed on time and on budget, whereas SENER affirms the project advances smoothly. In other news, Fieldwood sees plans for two major oil fields approved.

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MEXICO

Mexico Retains Oil Hedge Size Despite Planned Export Stop

The country’s program to guarantee oil income production in 2022 remained similar in scope than previous years, within the range of US$1 billion. Analysts say this is a sign Mexico cannot yet fully support President López Obrador’s plans to stop exporting crude.

Conflicting Views on Dos Bocas’ Costs and Progress

The government’s flagship mega-refinery Dos Bocas will reportedly cost more than 40 percent of the previous estimation and will likely not be finished in 2022, according to the government’s deadline. Analysts point out that the original price tag has increased significantly and now stands at US$12.5 billion.

Nevertheless, Mexico’s Minister of Energy, Rocío Nahle, offers a different view: “Dos Bocas is being built in record time. Opinions around the world are very positive,” she said.

Oil Production Increased Marginally in December 2021: CNH

The National Hydrocarbons Commission (CNH) reported that in 2021 oil production averaged. 1.65MMbpd a marginal increase of 0.1 percent compared to the same month in 2020.

Mexico Approves Fieldwood’s plans for Ichalkil and Pokoch

The scope of the CNH-approved work program includes the Ichalkil-6, Ichalkil-8, and Pokoch-3 wells. Fieldwood aims to invest US$476.6 million in 2022.

PEMEX Union Leader Candidates Take Positions

Around 90,000 PEMEX workers will be able to vote on Jan. 31 in the country’s first direct election for the NOC’s powerful union. Several candidates aim to change the culture in line with the government’s labor reform. As such, two candidates spoke out against Ricardo Aldana, the union’s current treasurer, who they say would continue in the same track as the disgraced former union head Romero Deschamps.

INTERNATIONAL

Oil Prices Decrease Despite Supply Fears Amid Ukraine Tensions

Crude oil prices plummeted to their lowest point in weeks due to a market-wide selloff mostly motivated by the uncertainty generated by a decline in US stock benchmarks. However, this decrease has been slowed down by fears of an interruption in oil supply that could result from an escalation in tensions between Ukraine, Russia, the US and NATO, reports MarketWatch. US State Department authorities ordered the evacuation of non-essential embassy staff from Ukraine this week, triggering an increase in value for oil futures contracts.

Water: The Biggest Challenge and Opportunity for Operators

Over the last several years, management and treatment of produced water in North American unconventional oil and gas fields has undergone significant changes. Companies are now looking for more sustainable, responsible water management programs that meet regulations and have an affordable cost.