Stronger Oil Demand for 2024: The Week in Oil and Gas

The International Energy Agency (IEA) raised its forecast for global oil demand in 2024. IEA had previously reported a decline in Mexican oil production due to reduced state investment and limited private company participation. Meanwhile, the Superior Audit of the Federation found irregular payments related to contracts for the Tula refinery.

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IEA Foresees Oil Demand Growth for 2024

The International Energy Agency (IEA) adjusted its 2024 global oil demand projections, anticipating it to surpass previous estimates. Despite a slower growth rate than 2023, demand is expected to outpace supply, leading to a "vulnerable" and "more volatile" oil market. The report forecasts a 930Mb/d demand increase in 2024, citing improvements in energy efficiency, electric vehicle adoption, and economic slowdown.

ASF Finds Irregularities in the Tula Refinery

The Superior Audit of the Federation (ASF) found MX$62.44 million in irregularities in PEMEX's finances, specifically related to excess payments and lack of formalization in the Tula Refinery's maintenance contracts. While noting PEMEX's overall compliance with legal and regulatory provisions, ASF highlighted three irregular payments, including discrepancies in contract payments, volume differences in catalyst acquisition, and the absence of conventional penalties application.

CNH Approves Diavaz's Work Program for the Ebano Field

CNH approved Diavaz subsidiary DS Servicios Petroleros' 2024 work program and budget for the hydrocarbon extraction plan under the CNH-M4-ÉBANO/2018 contract. The project covers an area of 1,569.12km2 in Northeast Mexico. Diavaz plans to drill 15 wells and conduct 30 Minor Repairs, aiming to recover 1.91MMb and 0.60Bcf. The allocated budget is US$66.89 million, with 53.9% for production, 42.8% for development, and 3.4% for abandonment.

Murphy Sur Begins Early Termination for Oil Block in Salina Basin

Murphy Sur, and partners PC Carigali and Sierra Offshore Exploration, requested CNH to begin the early termination and partial return of portions of an offshore oil block in the Salina Basin. This follows a trend where companies, including Chevron and Repsol, relinquish blocks due to limited commercial viability. Despite this, some companies have submitted 2024 work programs and budgets to CNH, with an anticipated investment of up to US$2.96 billion.

PEMEX Regains Leadership in LPG Sales

PEMEX regained leadership in Mexico's LPG market, capturing 60% of domestic demand in Jan-Sep 2023. The state-owned company's efforts, including Gas Bienestar, contributed to a 1.2% increase in sales compared to the previous year, reversing a decline post-2014 energy reform. PEMEX supplied 162Mb/d of LPG in September, meeting the needs of 17 million out of 27.8 million households. The Gas Bienestar initiative, launched in 2021, has sold around 2.8 million cylinders, saving over MX$795 million for consumers. PEMEX's focus on LPG and natural gas has resulted in a 5.5% year-on-year growth in natural gas production.

CNDH Demands Compensation for Victims After Explosion

CNDH demands compensation from PEMEX and Puebla authorities for victims of a 2021 gas pipeline explosion in San Pablo Xochimehuacan. The commission holds both responsible, citing irregular constructions and encroachment on the safety zone. PEMEX is faulted for inadequate measures against encroachments. Authorities are urged to provide training, conduct a census, and reconstruct homes for affected families.

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