Oil and natural gas activity in Latin America is resurgent after a severe pandemic-driven downturn, according to the CEOs of three oilfield services giants.

The chief executives of Halliburton Co., Schlumberger Ltd. and Baker Hughes Co. each cited a substantially improved outlook for the region in their third-quarter earnings calls last week.

Halliburton reported a 17% sequential increase in Latin America revenue during the quarter, driven by “increased activity in multiple product service lines in Argentina, Mexico, and Brazil, as well as higher well construction services in Colombia and improved project management activity in Ecuador.”

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CEO Jeff Miller said Latin America “delivered its best quarterly performance since 2015. We spudded the first well on a three-year integrated project in Brazil, deployed our new drilling technologies on multiple wells in Argentina, and prepared to mobilize for new work in Ecuador and Colombia.”

Schlumberger Ltd. reported a 10% sequential increase in Latin America revenue “due to double-digit revenue growth in Mexico, Argentina, and Brazil and from robust activity in well construction, reservoir performance, and production systems, respectively.”

CEO Olivier Le Peuch told analysts during the earnings call Friday (Oct. 22) that “all regions are set to benefit” from high oil prices, low global inventories and resurgent demand. 

“For example, this growth inflection is already visibly underway in Latin America, sparked by the resumption of exploration and the initiation of long-cycle development campaigns,” Le Peuch said. “Activity has strengthened throughout 2021, and revenue in this market is already at 2019 pre-pandemic levels.”

He added, “Year-to-date revenue growth in Latin America is at 30%, with broad activity growth across multiple countries, including Argentina, Brazil, Ecuador and Guyana.

“This growth is expected to strengthen further in the coming years due to ongoing long-cycle development campaigns.” 

Baker Hughes CEO Lorenzo Simonelli, meanwhile, said his firm “is poised to benefit from a strong project pipeline” of floating production, storage and offloading (FPSO) awards “driven by a number of opportunities in Latin America.”

Simonelli cited that in the third quarter, Baker Hughes booked two large FPSO awards in Brazil for power generation and compression equipment.

Latin America’s drilling rig count has been creeping upward, reaching 140 as of September, up from 83 in the same month a year ago, according to Baker Hughes data.

Mexico’s drilling rig count stood at 42 as of September, up from 36 in the same month last year.

Argentina’s rig count rose to 45 from 16 a year ago, while Brazil’s tally was flat year/year at nine, and Colombia’s rose to 21 from 12.

Mexico Gas Output Dips, Oil Inches Upward

Although its rig count never dipped below 35 even at the height of the pandemic, Mexico is an outlier and has struggled to maintain output levels.

Natural gas production in Mexico averaged 3.89 Bcf/d in September, down from 3.92 Bcf/d in September 2020, according to data from upstream regulator Comisión Nacional de Hidrocarburos (CNH).

State oil company Petróleos Mexicanos (Pemex) supplied 3.69 Bcf/d of the total, the same amount it produced in the year-ago month.

Private sector firms, meanwhile, produced 206 MMcf/d, down from 226.2 MMcf.

The top five producing fields, all operated by Pemex, were Quesqui (288 MMcf/d), Maloob (271 MMcf), Akal (238 MMcf), Ku (216 MMcf) and Onel (207 MMcf).

Total crude oil production was 1.67 million b/d, up from 1.64 million b/d a year ago.

Pemex produced 1.6 million b/d, versus 1.59 million b/d in the year-ago month.

Private sector-operated oil production totaled 66,640 b/d, up from 56,930 b/d.

The top five oil producing fields were Malob (288,000 b/d), Zaap (264,000 b/d), Xanab (99,000 b/d), Ayatsil (89,000 b/d) and Onel (54,000 b/d). All five are operated by Pemex.

Oil output from the Ku field recovered to 53,800 b/d in September from 48,341 b/d in August, when a fatal platform fire shut in 421,000 b/d of production.

The price of Mexico’s crude export basket stood at $78.52/bbl as of Friday.