PEMEX, Woodside Advance on Milestone Trion Project
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PEMEX, Woodside Advance on Milestone Trion Project

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Perla Velasco By Perla Velasco | Journalist and Industry Analyst - Thu, 12/15/2022 - 08:00

PEMEX is furthering its work on the development of the first deepwater field in Mexico in collaboration with Woodside Energy. Furthermore, the NOC plans to import all of Deer Park’s production by 2024. CRE also made great advancements on its permit approval slump. The regulator furthermore plans to present a modification to the criteria and methodology the regulator must use to conduct inspections. As the end of the year approaches, the trends of 2022 are clearly defined. However, the sector must face new challenges as previous COVID-19 pandemic conditions dissipate.

Ready for more? Here is the Week in Oil and Gas! 

PEMEX, Woodside to Develop First Deepwater Field in Mexico

PEMEX and Woodside Energy announced they will be starting the construction of the first deepwater oil field in the Gulf of Mexico. The Trion Project is a milestone for previously untapped deepwater development in Mexico. PEMEX discovered Trion in 2012. In 2017, BHP Petroleum and PEMEX signed an agreement for the development of the deepwater project. Following its merger with BHP Petroleum, Woodside Energy continued the agreement with PEMEX.

Global Oil Prices Remain Volatile

Oil prices fell at the beginning of the week. While Mexican oil reached its highest price on March 8, 2022, at US$119.62/b, by December 9 this price plummeted to US$60.42/b, about US$8 below what has been calculated for the 2023 federal budget. Factors like China’s COVID-19 lockdown measures and the slowdown of the economy have dragged prices down, while the oil leak at Keystone and the delay of oil ships in the Black Sea limited further lowered prices.

PEMEX to Import All of Deer Park’s Production by 2024

According to Alberto Velázquez, Director of Commerce, PEMEX, the company currently sends 25 percent of the Deer Park refinery’s products to Mexico. The NOC expects to be able to send 100 percent of Deer Park’s production to Mexico by 1H24, contributing to energy sovereignty. According to experts, the acquisition of Deer Park has proven to be a great business. Despite advancements in Mexico’s energy goals, analysts point out that Mexico needs better energy planning for the long term.

The Oil Industry’s Comeback and 2022’s Underlying Challenges

This year, Mexico’s oil and gas industry made a great step ahead in the recovery measures taken after the 2020 pandemic. However, various underlying issues regarding permitting and lacking new bidding rounds continue to be problematic. Along with newer conflicts based on the USMCA, these issues have shaped 2022’s market.

CRE Closes 2022 With 282 Approved Permits

Since the end of August, CRE has approved 282 permits for service stations from the 940 that remained in the backlog. This unlocked part of the delayed authorizations the regulator held since the beginning of the COVID-19 pandemic. Despite the increase of granted authorizations until today, the regulator retains a backlog of at least 658 authorizations. Nevertheless, some commissioners are noticing a change in the interior of the organization.

SENER Presents 2022 Analysis at the Senate

Rocío Nahle presented the Senate with a report of the energy ministry’s activities in 2022. The report covered Dos Bocas’ advancements, growing gas infrastructure, refining, accountability on electricity access and renewable energy. Nahle reported that security processes were being carried out at Dos Bocas before it could go into operation. SENER also reported that the capacity to interconnect and distribute gas increased, widening CFE’s ability to sell its surplus supply to the industrial sector. Furthermore, SENER reported that 99.25 of the population had access to electricity. This year, 29 percent of energy was generated by clean sources.

CRE Plans Extraordinary Inspections of Hydrocarbons Players

CRE plans to present a modification to Agreement A/037/2016, which states the criteria and methodology the regulator must use to conduct inspections. With this proposal, CRE can request to carry out inspections if it finds irregularities in reports regarding technical, regulatory, economic or financial matters. CRE aims to review statistical information, as well as weekly, quarterly and annual reports.

CRE Highlights Low-Consumption Service Station Opportunities

CRE highlighted the viability of developing low-consumption gas stations for small towns and zones that are difficult to access. According to Guillermo Pineda Bernal, Commissioner, CRE, Mexico has 1,000 zones where it would be profitable to develop such stations, although CRE does not receive many permit requests for them. According to Forbes, despite a tense environment regarding energy policy for private companies, these stations are a great opportunity for strategic investment.

CNH Reports on Its Activities in November

November was the first month that the CNH operated under its new Director, Agustín Díaz Lastra. As a result of the commission’s 11 working sessions, it approved two exploration plans,  three exploration and extraction plans and two transition programs. While private companies have abandoned 23 areas previously granted for exploration and extraction, CNH assured that these are normal processes as companies decide to focus on higher-value projects.

Photo by:   Twitter @rocionahle

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