Mexico’s Oil Production Turns Around April’s Low Point

Oil production in Mexico rebounded slightly after hitting its lowest level since the 70s in April 2022. The increment was boosted by the state company PEMEX, according to the most recent data from CNH. The commission registered 1.62MMb/d, a marginal growth of 0.5 percent, or 8Mb/d more compared to production in May.

Dropping to 1.51MMb/d this April, the NOC, led by CEO Octavio Romero, had not registered such low production figures since it discovered it flagship Cantarell field in 1979. According to CNH, May’s production represented a marginal month-over-month increase of 0.5 percent, or 9Mb/d. Year-over-year crude oil production fell 4 percent, or 66Mb/d. Oil production is still not on the levels seen during the same period in 2021. This can be directly linked to PEMEX’s production collapse after an August 2021 explosion on platform E-Ku-A2 at its main asset, Ku-Maloob-Zaap. The accident caused the death of seven workers, while another six sustained injuries. Throughout June, the NOC managed to raise production once again to 1.52MMb/d, an increase of 0.7 percent or 11Mb/d.

PEMEX amasses 94 percent of the total oil production, most of it coming from seven oil fields that produce 51 percent of the total, led by the Maloob, Zaap and Xanab offshore fields. Private companies contribute the remaining 6 percent.

The NOC has reduced its extraction of crude oil while increasing the production of natural gas condensates. However, these condensates are left out of international measurements of oil production. Despite the increment, these numbers stand in contrast to PEMEX's production goal, which was set at 1.9MMb/d by 2022.

Natural gas production also showed a rise of 1.6 percent month-over-month, up to 4.04MMcf/d. The company began including barrels of gas condensates, whose production currently stands at 220Mb/d, to show that production has stabilized and is on the rise. Analysts pointed out that these condensates are not part of international oil reporting, despite their high commercial value.

President López Obrador promised to rescue PEMEX, the most indebted oil company in the world, and achieve an oil production of 2.4MMb/d by the end of his six-year term in 2024. Following the COVID-19 pandemic’s lockdowns, he cut this number down to 2MMb/d. PEMEX now expects to produce 1.82MMboe/d considering both crude oil and condensates by the end of 2022.