Repsol Makes Discovery while PEMEX Suffers Q1 LossesBy Peter Appleby | Thu, 05/07/2020 - 18:24
Mexico’s deepwater activity got a boost this week as Spanish company Repsol announced the successful drilling of two wells with high potential. While oil continues an unsteady upward trend, PEMEX reported multi-billion-dollar losses during 1Q20.
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Spanish IOC Repsol, together with partners PC Carigali, Wintershall DEA and PTTEP, announced two discoveries in deepwater Block 29 this week. The consortium will now move towards appraisal on the “excellent petrophysical properties” seen from analysis of the two wells.
The US$23 billion loss posted by PEMEX is a concern for the company and Mexican government, regardless of the fault placed at the door of the weakening peso. Financial problems with the NOC are not new but must be resolved soon if the administration’s promises of energy sovereignty are to be met.
The unsettled nature of oil prices at present are likely to run at least until 3Q20 as oil demand slowly rights itself following the glut of oil produced by the historic drop in demand and price war between Saudi Arabia and Russia. OPEC+ production reductions are helping but prices will not be fixed overnight.
Despite prices being unsettled, their slow upward movement continues. Despite this, companies are still feeling the pain from COVID-19. Job losses are mounting for global companies that have an interest in Mexico.