PEMEX Production Falls Short
Concerns over PEMEX rose again this week with news that it had failed to meet its production target for 2020. Meanwhile, Niels Versfeld, CEO of Simmons Edeco, called for industry togetherness, as service provider Fugro showed how it is meeting the demands of oil and gas’ future.
All this and more in The Week in Oil and Gas.
PEMEX Misses 2020 Production Target
A year that was hoped to be a turning point for PEMEX turned out to be anything but that. The company reported it missed its production target by 103Mb/d in 2020, hitting only 1.61MMb/d on average. This is a 1.8 percent fall in comparison to 2019’s figures and another reason for stakeholders to feel concern. The production figure is perhaps not so severe news as it would have been had COVID-19 not destroyed demand for a large part of the year. Yet, this latest production shortfall will not help the company after a year in which it reported its highest quarterly losses ever and the highest COVID-19-related deaths of any company in the world.
PEMEX has set a 1.94MMb/d production target for 2021 but its debt of over US$110 billion and with the country’s major fields falling deep into maturation, questions already hang over whether 2021’s target will be achievable.
Simmons Edeco Urges Industry Unity
Niels Versfeld, CEO of drilling company Simmons Edeco, used his MBN Expert Contributor piece this week to urge industry unity. He underlined the fact that ahead of the issues that the industry must confront – low prices, higher ESG demands and a decarbonization transition – stakeholders can no longer consider themselves entirely individual entities. They must operate within a corporate ecosystem where all companies participate. “There is not an us or them,” says Versfeld. “Increasingly, we are realizing there is only ‘we’.”
He discusses in depth the issues that the Mexican oil and gas industry will have to deal with and sets out a challenge for all those involved. “Mexico has a rich tradition of overcoming challenges together. We need to honor that tradition in 2021. I challenge all of us to build at least one new relationship with a party you thought was an adversary or to take a step to work together with a current stakeholder in your world. Beyond that, I encourage us all to share these stories of collaboration and partnership, so the larger society in which we all live can see the true story.”
The past year has accelerated the adoption of new technologies and the fall in oil prices has pushed oil majors to advance further in their decarbonization plans. Service companies that aid operators are also getting ready to make this change, but one appears ahead of the others: Fugro.
Fugro has dived headlong into areas like remote monitoring for offshore assets and considered its own corporate direction to pivot in line with major IOCs. Last November, company CEO Mark Heine declared in an interview with Effect magazine that, “Fugro is no longer defined by oil and gas.”
In an interview with MBN, Fugro Mexico Country Manager Pedro Regino said the company’s vision is to become the specialist in geo-data for clients in oil and gas, infrastructure and other markets. “Our goal is to deliver solutions that enable design, construction and asset monitoring in a safe and sustainable way. In Mexico, the entirety of our operation is dedicated to the oil and gas sector where we support exploration, field development and construction. What we are seeing at a global level is that the oil and gas sector accounts for half of our revenue and we are seeing a rapid worldwide increase in the area of renewable energies like wind, solar and others.”