PEMEX Might Be Inflating Production LevelsThu, 08/05/2021 - 15:34
Anonymous sources speaking to Bloomberg claim that PEMEX is providing crude production figures that are measured at higher temperatures than those used by regulators and international industry benchmarks, thus resulting in higher numbers. The NOC measures its production levels at 20°C (68°F), while CNH measures it at 15.56°C, which can bump PEMEX’s numbers as much as 16,000b/d when compared to CNH’s data. While the piece describes this effect as “inadvertent”, it does also describe its sources as “people familiar with the practice,” suggesting a degree of intention.
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ENI Strikes Oil Again
Italian NOC ENI has announced a new oil discovery with major potential that took place in Block 10, in which ENI is an operating partner and majority stakeholder, with 65 percent ownership of the joint venture together with 20 percent owned by Lukoil and 15 percent owned by Cairn Energy through its subsidiary Capricorn. The block is located in the Cuenca Salina Sureste Basin offshore region, approximately 76km off the Dos Bocas port in Tabasco. It is also located a mere 15km away from ENI’s previous oil discovery in Saasken, which was announced at the end of 2020 and which will be appraised at the end of this year. The discovery happened in the Sayulita-1EXP well, which is part of ENI’s Sayulita Exploration Prospect within Block 10. This well was approved by CNH on June 3rd, at which time it was expected to reach a maximum depth of 1905m at water depths of 325m, which makes this a mid-deepwater well. The discovery was made in the Upper Miocene segment, reaching a total depth of 1758m.
PEMEX Responds to Moody’s
PEMEX announced its latest market results last week, considered by the NOC as good news that could act as a counter argument to the report made by Moody’s in its recent credit rating downgrade. The NOC reported that its total losses during the first semester of 2021 were reduced by 96.2 percent when compared to the same period last year, from US$30.530 billion to US$1.157 billion. Its total earnings also increased 42.8 percent when comparing these two periods, currently totaling US$33.470 billion. PEMEX director Octavio Romero Oropeza highlighted the positive nature of these results. He also went on the defensive in regards to Moody’s for its credit downgrade of PEMEX, referring to it as “an act lacking in professionalism and ethics; in summary, even shameful.” He also claimed that the rating agency’s methodologies present contradictions.
PEMEX Gasoline Production Levels Decrease
PEMEX is reporting decreasing levels of gasoline production. According to PEMEX’s own reports, at 189,000b/d, gasoline production at PEMEX’s refineries fell by 12.04 percent during June 2021 when compared with June 2020, a startling revelation considering the aggressive decrease of fuel consumption caused by the pandemic that the market experienced at this time last year. These June 2021 levels also represented a decrease of 12.41 percent when compared to May 2021, when they reached 216,000b/d. In fact, these levels represent the lowest since October 2020, when production reached 181,000b/d.
LPG Retailers Go On Strike
A national strike has been announced by all retailers commissioned to sell LPG by a number of relevant industry associations, including the National Gas Guild. The strike began Tuesday morning when the guild ordered LPG trucks in Mexico City and the State of Mexico to remain in their storage yards and refrain from doing any kind of distribution work. This order soon extended to the rest of the country, in some cases leading guild organizers and commission agents to block entrances to storage yards and parking lots so that LPG trucks would not be allowed to leave. The main reason for the strike is the price caps and controls for LPG that were announced by CRE over the weekend, following the publication of an “emergency decree” by SENER to “protect LPG consumers”.