PMI Cuts Ties With Vitol; Eni Extends Saasken ExplorationBy Peter Appleby | Thu, 12/17/2020 - 12:07
A corruption scandal embroiled PEMEX’s international trading arm this week, while Italian IOC, Eni, got the green light to explore the Saasken field further. Meanwhile, industry insiders and experts gave their opinion on President Andrés Manuel López Obrador’s first two years in power, ONEXPO requested that gas station workers be vaccinated quickly and the IEA announced its downgraded oil demand forecast.
All this and more in This Week in Oil & Gas.
PEMEX’s international trading arm, PMI, has temporarily suspended any business with oil and commodities trader Vitol after the Dutch company accepted charges of paying bribes in Latin America, including PEMEX employees.
Vitol, the world’s largest independent oil trader, was accused of paying PEMEX employees for confidential information using shell companies. Vitol agreed to pay US$164 million to settle charges relating to bribery in Mexico, Brazil and Ecuador.
President Andrés Manuel López Obrador said the government would investigate all accusations of bribery, which are said to have taken place between 2015 and 2020, and that those involved would face consequences.
The start of the month marked two years since President López Obrador entered office. It has been a fraught with uncertainty for private players, as public dialogue has focused on the president’s perceived shortcomings of the Energy Reform. But private and public interests have advanced in their aim to increase Mexico’s production and help develop the energy industry. So where does the industry find itself, two years on? MBN spoke to industry insiders to get their views on the industry’s current position, advances that have been made so far and where the future could lead.
Italian operator Eni, the first private player to produce oil in the offshore arena since the Energy Reform, has been granted its wish to extend exploration of the Saasken field. Last week, CNH approved the exploration plans, which will require investment of around US$126 million, to drill up to two wells in the area that was discovered in February. At the time, Eni announced that early exploration suggested Saasken could hold 300MMboe.
Gas station association ONEXPO, headed by its President Roberto Díaz de León, wrote to the Ministry of Health to ask that gas station workers be among the first groups to receive the COVID-19 vaccine. Díaz de León argued that gas station workers are essential and that their health is at risk because they deal with the general public. There are some 220,000 gas station workers across the country’s 12,700 gas stations, he noted.
Last week, Mexico approved the emergency use of the Pfizer-BioNtech vaccine and released the strategy to begin vaccinating the population. The vaccination campaign will begin this month with frontline health workers.
The International Energy Agency has forecast that oil demand will remain lower than had been expected at the start of the pandemic as demand from the aviation industry remains depressed. “Demand is clearly going to be lower for longer than expected when the supply agreement was concluded in April,” said the IEA’s December 2020 report.
The agency’s December report trimmed 170Mb/d from its 2021 forecast in its last report, saying “this is mainly because of another downgrade in jet fuel/kerosene demand, which will account for around 80 percent of the overall 3.1MMb/d shortfall in consumption in 2021 versus 2019.”
Rising numbers of COVID-19 cases across Europe and the US could cause further changes to the forecast, though with vaccinations beginning, there is hope that demand picks up more quickly than expected.