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News Article

Private Sector Wants to Foster Natural Gas Production: AMEXHI

By Kristelle Gutiérrez | Thu, 07/21/2022 - 15:22

In June, CNH reported that private companies in Mexico had reached a historic production level of 100Mb/d. As investments in the Mexican energy industry have continued to increase, members of the Mexican Association of Hydrocarbon Companies (AMEXHI) are utilizing this momentum to announce that they are looking to foster the production of natural gas, too, as the country has had to heavily rely on the US to supply the resource.

Amid rapidly rising natural gas prices, industry experts and authorities have expressed their growing worry over the Mexican dependence on the US’ gas supply, since the American product is the source of 65 percent of the electricity supply in Mexican homes, according to S&P Global.

Because Mexico is not regarded as a highly relevant natural gas producer, members of AMEXHI have called out for the need to change this. In an interview with Milenio, Merlin Cochran, Director General, AMEXHI said “We are sitting on significant untapped potential which we have not been able to utilize. There has not been much done about it and we are hoping that we can come up with better results to unlock that potential.”

According to CNH, by June 2022, private oil operators in Mexico had spent US$10.81 billion worth of investments in hydrocarbon exploration and drilling contracts. Ninety-eight contracts resulting from companies that entered bidding rounds between 2015 and 2018 have produced US$7.36 billion worth of investment, in addition to US$899 million gained through farmout agreements. 

Eighty-four percent of Mexico’s private oil production is carried out by five companies: Fieldwood, Petrofac, Hokchi Energy, Eni and Diavaz, all of which are members of AMEXHI. Nevertheless, the private sector’s production represents merely 5 percent of Mexico’s overall oil production, with 95 percent remaining in the hands of state-owned company PEMEX.

Italian oil giant Eni’s combined investments in Area 1 total US$2.05 billion. Eni’s contract area consists of three offshore fields, called Amoca-Miztón-Tecoalli, which are estimated to contain 2.1billion boe of recoverable resources, of which 90 percent is oil.

In second place, Hokchi Energy’s resources in the contract area CNH-R01-L02-A2/2015 amount to US$1.35 billion, with which the company hopes to develop fields holding 61MMb of light crude oil and 29Bcf of gas between proven and probable reserves. Lastly, Fieldwood Energy, whose Mexican portfolio includes two offshore fields names Ichalkil and Pokoch, has accumulated US$1.03 billion worth of investment in the contract area CNH-R01-L02-A4/2015, totaling 68MMb of light crude oil and 92Bcf of gas.

Furthermore, CNH is expecting that further investments for exploration and development will reach US$46.54 billion for approximately 111 contracts stemming from bidding rounds, partnerships and migrations.

The data used in this article was sourced from:  
Energy21, Milenio, S&P Global.
Kristelle Gutiérrez Kristelle Gutiérrez Junior Journalist & Industry Analyst