News Article

PEMEX Halts 7-Year 1P Reserve Fall, Discussions on Zama Ongoing

By Peter Appleby | Fri, 05/08/2020 - 20:37

After the massive losses suffered in 1Q20, some very positive news has arrived for PEMEX. The NOC’s report sent to Mexico’s Chamber of Deputies explains that between Jan. 1 2019 and Jan. 1 2020, PEMEX managed to increase 1P (proved) reserves by 2.4 percent and halt a 7-year drop, reports Forbes.

PEMEX’s 1P reserves now stand at 7.18 billion boe and should last the company 8.4 years if resources are extracted at the current rate, adds Forbes. This is a vital step forward for PEMEX, following a massive US$23 billion loss (MX$562.25 billion) reported for 1Q20. It will also offer breathing space from credit agencies, who have repeatedly downgraded PEMEX – and Mexico – due to the company’s inability to increase its reserves to support heightened production. Mexico’s 1P reserves have fallen from 13.8 billion boe in 2012 to 7.18 billion boe in 2020.

According to PEMEX, “the increase in proven reserves came principally from the Ayatsil, Balam, Xux, Yaxché, and Xanab fields. On the other hand, decreases were principally from the Jujo-Tecominoacán, Xikin and Uchbal fields,” reports Forbes.

PEMEX is still locked in debate with American company Talos Energy over the rights of the Zama discovery. In 2017, Talos announced the discovery of Zama, one of the largest shallow water discoveries of the past two decades. However, this reserve crosses into a nearby PEMEX-held block and the NOC is also claiming rights to exploit it. According to Talos’ 1Q20 financial and operational accounts, the company is still in discussion with PEMEX over the potential unitization of the Zama field.

The talks, say Talos, “continue to make progress under the regulations of the Mexican Ministry of Energy. Talos expects that the National Hydrocarbon Commission (CNH) will make a determination in the coming weeks regarding the shared nature of the Zama reservoir between Block 7 and the adjacent block controlled by Petróleos Mexicanos.”

At a CNH meeting yesterday, Commissioner Héctor Moreira highlighted the need for PEMEX to drill an exploratory well to compliment the data that Talos Energy has already found through its own drilling campaign to better determine sovereignty over rights and to gain a better insight on the reservoir’s geology. According to Energía a Debate, Moreira said that: “what is urgent here is the drilling of Asab (the field located on the PEMEX allocation side) so that we can have the geological information of the same deposit but on the PEMEX side.”

Commissioner Alma América Porres also impressed upon PEMEX the need to fulfil the exploration on their side so that the unitization can go ahead. According to Energía a Debate, Porres said that CNH did not yet have the “elements to have effectively and sufficiently defined the assignment side or the extent of the field on the assignment side.”

Qatar Petroleum is also expanding its presence in Mexico. The company just announced it has bought a 30 percent share in three blocks owned by French IOC Total. Qatar Petroleum will now participate in Block 15, 33 and 34, says Expansion. These blocks are located between 30 and 90km from Ku-Maloob-Zap.

The data used in this article was sourced from:  
Energía a Debate, Expansion, Forbes, Talos Energy
Peter Appleby Peter Appleby Journalist and Industry Analyst