Private Players Achieve Production MilestoneBy Conal Quinn | Wed, 06/29/2022 - 18:18
Among this week’s top stories in the oil and gas industry, the private sector can celebrate a production milestone, surpassing 100Mb/d collectively. Meanwhile, PEMEX ramps up exports to the US at the expense of the European and Asian markets. Following the ban placed on Russian fuel by President Biden, the US is importing its highest quantity of heavy crude in two years.
Ready for more? Here is this week in oil and gas!
Private operators have produced more than 100Mb/d for the first time. The 21 private companies currently active in Mexico already contribute 6 percent of the national crude oil production, which stood at 1.61MMb/d on average in May 2022. This production level breaks the record for Mexico’s private operators, assuaging concerns over the sector’s productivity and capacity. According to the CNH, May’s production represented a marginal month-over-month increase of 0.5 percent, or 9Mb/d.
PEMEX is foreseeing a significant increase in demand for its products. Even though the NOC has increased production, imports have also risen because local production does not suffice to cover national demand. According to PEMEX, this month it will have sold 810Mb/d of gasoline on average, which is 40.6 percent more than the same month last year, when 576Mb/d were sold. This would also represent the highest sales of this year so far. For diesel, PEMEX expects sales to nearly double compared to June 2021, reaching 401Mb/d. Jet fuel sales would reach 84Mb/d, a 37.7 percent increase compared to June 2021.
In 2021, Mexico ranked fifth in a list of 150 countries that face the most international disputes concerning private investment. According to the International Chamber of Commerce (ICC), most of Mexico’s cases involve companies in the energy and infrastructure industries, which recently saw weighty modifications to their public policy laws or operational guidelines. The ICC claims that this relatively high number of disputes has contributed to reducing investment or driving it away altogether, as many companies feel these changes could potentially limit their participation in the energy and infrastructure sectors.
Pacífico de Mexinol is set to invest more than US$468.3 million to build a new methanol plant in the port of Topolobampo in Ahome, Sinaloa. Mexinol plans to construct the new plant near a pipeline and other existing infrastructure where it will process natural gas from Texas to produce up to 5,000t/d of methanol which will be initially exported to Southeast Asia and then sold to the Mexican market. The company also said that this project will generate up to 3,000 jobs for the local community during the construction phase and approximately 400 permanent jobs once operations start.
In June 2022, the US-based company Valero Energy started operations at its sixth storage terminal in Temascalapa, the State of Mexico. State Governor Alfredo del Mazo said the project is the outcome of a US$175 million investment. As the operator of the second-biggest oil refinery in the US, Valero is mainly engaged in the manufacture and sale of fuels and petrochemical products, as well as the generation of electric power through its subsidiaries. Its assets include 15 oil refineries, 11 ethanol plants and have a total production of 3.1MMb/d.
State-owned oil company PEMEX significantly increased its crude exports to the North American market, particularly to the US, according to the most recent report of the NOC. Nonetheless, the report shows a significant cut in exports to Europe and Asia.
On July 1, 2022, the Dos Bocas Refinery will become the second major infrastructure project of President López Obrador to be inaugurated. The chosen date for its inauguration is significant, as it celebrates the fourth anniversary of López Obrador’s electoral triumph. The Ministry of Energy (SENER), the entity in charge of the project, has stated that the refinery is already in its final construction stage. During this June, the installation of all the equipment will be completed.
The National Hydrocarbons Commission (CNH) is forced to cope while working with fewer commissioners, who are in charge of regulating and supervising hydrocarbons processes such as exploration, extraction, production and transportation. The institution remains operational with only four out of the seven commissioners required to function properly.
Sonatrach, Algeria’s state-owned hydrocarbon player, has unveiled a massive new gas discovery in the Sahara Desert that could house as much as 12tcf of reserves and ranks as the country’s biggest find in the past 20 years.
OPEC+ is more than half a billion barrels behind on its pledge to supply world markets with oil, exacerbating concerns about the group’s ability to balance the global market.
The world is heading for a “turbulent period” as tightening supplies of liquefied natural gas and oil exacerbate a global energy crunch, Shell CEO Ben van Beurden said.
The Ministry of Petroleum of the Republic of Niger announced the country has reached a new milestone in furthering the regional gas market through the progressing construction of the multi-billion Trans-Saharan Gas Pipeline (TSGP), alongside Algeria and Nigeria.