PEMEX Changes Investment Plan for Ek-Balam FieldThu, 06/17/2021 - 18:34
PEMEX will invest US$834 million in its Ek-Balam offshore field. 67 percent of this investment will take place in 2021. This information was revealed on the NOC’s modifications to the field’s development plan as submitted and approved by CNH. The field already has 62 wells drilled within its area and it currently produces medium to heavy crude. This new investment plan will increase the new wells drilled target from five to 12, along with nine new ducts. According to PEMEX and CNH authorities, this modification responds to new operational and strategic needs that prioritize this field as a renewed source of production.
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PEMEX Will Not Drill Delimiting Well in Zama
CNH has reported that PEMEX will not be drilling the delimiting well that could prove its majority stake claim over the hydrocarbon resources available in Zama. This news came from the CNH’s latest approval of a new exploration plan that PEMEX wants to apply to its Uchukil field, which neighbors Talos Energy’s block with access to Zama resources. The new plan contemplates an investment of US$180.9 million. It also does not include the drilling of the Asab-1 exploratory well that was supposed to prove PEMEX’s majority stake over Zama’s resources.
Fuel Oil Demand Decreases
Data from SENER indicates that national fuel oil consumption has decreased considerably given the market gains from renewable energy sources. The largest national consumers of fuel oil, which in Mexico remains exclusively produced by PEMEX, are CFE’s thermoelectric power plants. However, the percentage of energy generated by these plants has been decreasing steadily over the last couple of years. Generation data indicates that this is due to the larger amount of renewable energy projects that have come online during that time. According to data reported to SENER by CENACE, in April of 2019, energy generated at thermoelectric plants amounted to 3.2 million MW/h. By April of 2020, that number reached 1.6 million MW/h, representing a decrease of 51 percent in just one year. By April 2021, that number is reported to be only slightly above the previous results, meaning that the decrease has been stabilized but the curve continues to show a negative trend. This is without taking into account that these plants are mostly fed fuel oil but can also take diesel or even natural gas if necessary.
Doubts Raised About Status of Dos Bocas
A recent PEMEX report submitted to SHCP does not describe the Dos Bocas refinery project’s finances clearly. It also estimates a delayed finishing date without further explanation. The report describes PEMEX’s investment agenda for the year in detail. Generally, this report is supposed to include financial and material progress for each of the NOC’s projects. However, this year’s progress report for Dos Bocas in 2020 was left blank. The filing only includes the following information: Dos Bocas “still requires US$13.5 million in investment and will be finished in November of 2022.” This does not fit with either the refinery’s approved budget for that year (US$2.5 billion) or the currently contemplated launch date (which President López Obrador still says is July 1st, 2022).
Unitization Agreement Will Be Finalized: Talos
In an exclusive interview with MBN, Talos Energy CEO Timothy Duncan remained confident that the Zama unitization agreement would happen according to best practices. “We have published a statement regarding the release where we addressed not only the third-party engineering firm’s viewpoint but that of Netherland, Sewell & Associates (NSAI) as well. There are different data points out there and negotiations on many key commercial points in the unit agreement are ongoing, including the initial tract participation splits. That said, it is our expectation that the unit agreement will be finalized in accordance with international best practices and will carry standard redetermination provisions. In that case, the initial tract participation will be corrected over time as more data becomes available. So, in summary, the discussions on many points are ongoing and there will be a mechanism to ensure that the ‘true’ tract participation prevails in due course,” said Duncan.