Positive Signs Arrive Alongside Worrying Comments for Privates

Mexico’s premier industry conference, the Mexico Oil & Gas Summit, is to go digital for this year only as COVID-19 limits meeting in-person. Though this year has seen many delays to projects in Mexico and abroad, Rystad Energy forsees a spectacular rebound in 2022 following the revival of the industry once demand has risen again. President Andrés Manuel López Obrador has again caused concern with talk of reversing the Energy Reform if PEMEX is unable to recover.

All this and more in The Week in Oil and Gas!

Mexico Oil & Gas Summit Goes Digital

The 2020 iteration of the Mexico Oil & Gas Summit is to move online, Director General of Mexico Business Group Jeroen Posma announced this week. Over the last seven years, the Summit has become an essential source of discussion, debate and business-building between industry stakeholders, with government ministers, key decision-makers and leading analysts among those that have featured at previous events.

The two-day online event will now take place on October 28-29.

“As organizers of over 45 industry-leading, high-level B2B conferences in Mexico, we understand that face-to-face conferences and networking events are tremendously valuable for sponsors and attendees. Rescheduling Mexico Oil & Gas Summit 2020 from July to October was inevitable and over the past months we have realized that face-to-face conferences will not return in the near future. We are embracing the new normal and believe that the time is now to reshape the future of B2B conferences in Mexico,” Posma said.

Project Sanctioning to Bounce Bank in 2022

After a year of extreme turbulence in 2020, project sanctioning rise in 2021 jumping to pre-pandemic levels in 2022, this according to a recent report by Rystad Energy.

The firm predicts that the values of sanctioned projects will jump to US$95 billion in 2022 in offshore, from US$34 billion this year to  US$64 billion in 2021, while in 2019 US$101 billion worth of projects were sanctioned. In onshore, 2020’s US$19 billion will become US$36 billion in 2021 and US$100 billion in 2022.

“The COVID-19 pandemic has devastated global oil and gas project sanctioning this year and will cause total committed spending to drop to around US$53 billion from 2019’s US$190 billion. Postponed plans will, however, cause the total worth of final investment decisions (FIDs) to double next year and exceed pre-pandemic levels already from 2022,” remarked the report.

AMLO Floats Reform Reversal Again

President Andrés Manuel López Obrador floated the possibility of reversing the Energy Reform should PEMEX continue to struggle and he be unable to “rescue” the state company, Reuters has reported.

The president, a long-term critic of the Energy Reform has frequently repeated his desire to reduce the potential of private companies at the cost of PEMEX. He has taken measures to lessen Mexico’s economic revenue on the company and proposed further fiscal backing of the heavily-indebted PEMEX in the latest federal budget proposal.

The president believes that greater private activity in the oil and gas industry will reduce the power of PEMEX, which he hopes to use as a lever of economic development, and stop the country from being energy dependent.