PMI Pushes Imports Back, Shell Says Goodbye to Block 15By Peter Appleby | Thu, 05/14/2020 - 18:27
Like every other industry, oil and gas is still grappling the impact of the global pandemic. This week, PEMEX’s international arm, PMI, enacted a force majeure on imports heading to the country, while the Mexican oil basket stumbled in its upward trend. The NOC’s plunging retail sales were highlighted, while Shell bid farewell to Block 15.
PMI’s decision to enact force majeure against incoming gas imports may well pay off. While it risks future relationships with refineries and suppliers, pushing imports back to the second half of this year avoids paying for storage now and ensures the country will receive fuel when its needed.
The Mexican oil basket, like other world benchmarks, is continuing to make progress after the recent storage crisis. Yet, volatility remains the name of the game, as prices stuttered again this week. Will the reopening of economies push the crude mix upwards?
This week, Shell officially handed over its stake in shallow water Block 15 to its partner, Total. Though the operator retains interest or operation in 10 blocks, relinquishing of participation could become more common as operators trim their commitments in line with budget cuts.
PEMEX suffered a 34 percent drop in retail sales during 1Q20 as COVID-19 took hold. This difficulty looks to be repeated in 2Q20 as OPEC reports worrying predictions. The second half of the year, however, should provide happier news.