Private Production, Investment up in August

Private oil companies operating oil fields in Mexico set another production record in August. Having surpassed 100Mb collectively for the time in May, production reached 106.115Mb/d in the month gone by. The companies propelling the production milestone have upped their month-over-month investment levels, too.

The new milestone achieved by IOCs in Mexico was driven primarily by the performance of Eni and Hokchi’s shallow-water portfolios. The Italian outfit's production from its Amoca, Mizton and Tecoalli fields (AMT) led private players with an average of 20.36Mb/d, breaking a streak of three consecutive months of decline from the cluster with an increase of 9.911Mb/d, more than double July’s rate of output. Meanwhile, production from Hokchi’s namesake field in August surpassed that obtained from the British-Argentine IOC’s Ichalkil and Pokoch fields, which were the most productive privately-operated fields in Mexico this time last year, before the arrival of Eni’s FPSO in February 2022.

According to CNIH statistics, as of August 2022, the production of the Ichalkil and Pokoch fields reached 23.58Mb/d, a 4.21 percent increase compared to July. The Hokchi field meanwhile reported average production of 24.69Mb/d, a 19.72 percent increase from the previous month and the highest rate since commercial development of the shallow water field began. In total, the volume of oil extracted from blocks awarded during the bidding rounds reached 183.45Mb. Of this figure, 106.11Mb were produced by private oil companies, as PEMEX's Ek Balam field remained the highest producing contract from the Energy Reform, accounting for 77.34Mb alone.

Investments registered from E&P contracts awarded during the bidding rounds held under the previous administration were also up US$1.07 billion from the previous month, reaching US$11.88 billion in August. This figure, which includes both contracts awarded to private companies and PEMEX migrations, represents a significant increase compared to the previous month when investment grew by a meager 1.62 percent. Overall, the pace of investment in blocks operated by private players has slowed over the last 11 months, as a Catch-22 situation of sorts plays out between IOCs and the federal government. While President López Obrador has been highly critical of private companies’ failure to meet the investment commitments of the contracts they were awarded, IOCs, have placed the blame on the uncertainty caused by López Obrador’s decision to suspend new rounds, drastically changing the landscape from when they entered the market.

According to the Hydrocarbon Information System (SIH), US$935 million was invested in exploration and extraction activities in August 2022, a 117.95 percent increase compared to July. So far this year, the contracts which have received the most investment are PEMEX’s Ek-Balam with US$299 million, followed by Hokchi’s Ichalkil and Pokoch fields with US$272 million. As for the contractual areas that have seen the most cumulative investment since they were awarded under the previous administration, Eni’s AMT fields lead with a total of US$2.12 billion, closely followed by PEMEX’s Ek-Balam, which has received US$2.085 billion. In third place is the Hokchi field with a total investment of US$1.47 billion, with Ichalkil and Pokoch in fourth place receiving US$1.52 billion. Woodside’s deepwater Trion field rounds out the Top Five with US$608 million invested thus far.