Mexico Set to Develop First Ultra-Deepwater Field

The trial over the Vitol bribery case advances in the US, while in Mexico, Judge Javier Laynez aims to address PEMEX’s dominance in the industry. Moreover, CNH approved the development project for ultra-deepwater field Trion.

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CNH Approves Woodside-PEMEX Trion Project

The Trion ultra-deepwater field in the Gulf of Mexico will be developed by Woodside and PEMEX following CNH's approval of their plan. The project, marking Mexico's first ultra-deepwater development, will leverage Woodside's expertise and facilitate technology transfer to PEMEX. Trion, discovered by PEMEX in 2012, is expected to produce oil and gas by 2028, with peak outputs projected at 110Mb/d of oil and 101MMcf/d of gas.

Former Vitol Executive Faces Trial Over PEMEX Subsidiary Bribes

Javier Aguilar, a former Vitol executive, is facing trial in the US for alleged bribery involving a PEMEX subsidiary. Aguilar is charged with bribery, money laundering and violating anti-bribery laws. He is accused of orchestrating payments to secure commercial advantages linked to contracts of the PEMEX Procurement International (PPI) subsidiary.

Judge Aims to Address Asymmetric Regulations

Judge Javier Laynez of the Mexican Supreme Court plans to propose a constitutional review of the Hydrocarbons Law to address concerns about PEMEX's dominance in the hydrocarbon market. The 2021 amendment removed asymmetric regulations, favoring PEMEX and hindering private players. Laynez aims to declare PEMEX's advantage unconstitutional, allowing private entities to be regulated fairly.

Mexico's Private Companies Do Not Set Production Goals for 2024

Private oil companies in Mexico lack a new production goal for 2024, as reported by the Mexican Association of Hydrocarbon Companies (AMEXHI). Despite annual forecasts, companies have not met their goals and there is no new estimation for the administration's end. Challenges, including pandemic disruptions, have affected progress. AMEXHI highlights the need for favorable investment conditions, consistent energy policies and collaboration between the government, PEMEX and private operators to explore Mexico's untapped energy potential.

PEMEX Reactivates Superlight Oil Exports After Six Years

PEMEX has resumed super light oil exports after six years, selling 48Mb/d of Olmeca oil. This hydrocarbon accounts for 11% of daily production and 5% of total exports. Olmeca's characteristics make it valuable for high-value petrochemicals and lubricants. Despite a 12% drop in crude exports, PEMEX achieved 1.087MMb/d in May. However, the company faces challenges in refining capacity due to the shift towards heavier crudes.

PEMEX Faces Liquidity Concerns as Debt Looms

PEMEX's liquidity and debt worries persist, as Fitch Ratings highlights it as the top concern among Latin American oil companies. Despite significant government support, PEMEX holds US$25 billion in short-term debt and US$4 billion in bonds due in 2023. Its high debt-to-reserves ratio, rising extraction costs and status as a fallen angel (credit rating downgrade to junk) set it apart from regional peers like YPF, Petrobras and Ecopetrol.

CNH Greenlights Nojol-1 Well

CNH has granted PEP authorization to drill the exploratory well Nojol-1EXP in shallow waters as part of the exploration plan for assignment AE-0154-2M-CHALABIL. The well aims to discover commercially viable light oil in fractured carbonate rocks from the Cretaceous and Upper Jurassic Kimmeridgian plays. The drilling program spans 196 days, with a total cost estimated at US$113.83 million.