The Week in Oil and Gas: PEMEX-filled Week

PEMEX’s recent performance may have diminished the possibility of further downgrades, although the federal government’s anti-fuel theft operations may have brought more bad news than good for the NOC. 

Positive Outlook for PEMEX in 2020

The likelihood of downgrades for PEMEX in 2020 has been reduced due to the NOC’s more positive outlook for the year, said Mexican investment bank Ve por Más (Go for More) this week.

The bank’s Director of Stock Market Strategy and Analysis Juan Rich said PEMEX’s stabilization of oil production and the positive results of the company’s recent market activity had positively impacted its standing. However, international rating agency Fitch Ratings still grades PEMEX at BB+, a “junk” rating.

Meanwhile, PEMEX Director General Octavio Romero said the NOC is aiming for production of “above 1.9 million barrels” (per day) by the end of the year.

Anti-theft Savings May Have Resulted in Losses for PEMEX

The MX$56 billion (US$2.98 billion) saved through the administration’s fight against fuel theft has been cut drastically in value due to the company’s sales figures.

According to Romero, the government’s anti-theft fight caused theft to drop from 57,400 barrels per day on average in 2018 to just 5,100 per day during 2019. In the same period, PEMEX’s sale of diesel dropped by 79,400 barrels per day.

According to calculations made by El Economista, while 3.039 billion liters of fuel were saved during the anti-theft campaign, lower fuel sales led to a loss 77 percent larger than what was saved through this strategy.

PEMEX Wants to Operate Zama

Romero has stated the company’s desire to operate the Zama field, which was first discovered in 2017 by American IOC Talos Energy and its consortium partners.

The Zama field, which stretches across Talos’ Block 7 and surrounding PEMEX areas, was described by PEMEX as an area of “national interest.” Due to PEMEX’s intention to drill wells over two potential nearby reservoirs, operating the Zama block would help reduce operating costs and be more convenient, Romero stated.

As PEMEX’s negotiation with the consortium led by Talos Energy for the unification of the Zama reserve continue, there has been disagreement over which territories have the lion’s share of Zama’s resources. While Talos claims that 60 percent of the discovery rests on its Block 7, Romero said PEMEX’s analysis showed that most of the reserve was in PEMEX-owned territory.

PEMEX May Need to Drill Zama Well in 20 Days

CNH has stated that the suspension of drilling operations at PEMEX’s Asab-1 well in the Zama field could be lifted, which would give PEMEX just 20 days to begin its drilling works.

CNH Commissioner Alma América Porres said during the Energy México 2020 forum that PEMEX has been waiting for a drilling platform and, once it has it, the suspension could be lifted.

The drilling of Asab-1 is a necessary part of the unification process that PEMEX is negotiating with Talos Energy. Not drilling the well could put that unification in doubt.