Mexico’s private oil industry expects to reach crude oil production of 50,000 b/d by the end of this year, according to the Asociación Mexicana de Empresas de Hidrocarburos (AMEXHI).
The trade group, composed of 43 oil and gas operators, said last Thursday the market value of the production would exceed $1 billion/year.
By 2024, the final year of President Andrés Manuel López Obrador’s term, the industry has set a goal of 280,000 b/d, with all of the output coming from contracts awarded between 2015 and 2018 under the framework of the 2013-2014 constitutional energy reform.
The goal of 50,000 b/d for 2019 is “a significant increase” from the 1,500 b/d produced in 2015 from the first contracts that national hydrocarbons commission CNH authorized under the reform, AMEXHI said.
Output by state oil company Petróleos Mexicanos (Pemex), meanwhile, averaged 1.683 million b/d in August, down from 2.267 million b/d averaged in full-year 2015. CEO Octavio Romero Oropeza said in September the company expects to surpass 1.8 million b/d by the end of the year. As of June, private operators were producing about 39,000 b/d, comprising output from mature fields awarded in the Round 1.3 bidding process, as well as partnerships between private operators and Pemex, AMEXHI said.
In July, Italy-based Eni SpA achieved first oil at the Miztón field, part of Area 1, which CNH awarded via the Round 1.2 process in 2015. Eni produced 5,415 b/d from the shallow water block in July and expects the early phase production to reach 15,000 b/d. Full field production from a floating production, storage and offloading unit is to begin in 2021, reaching a plateau of 100,000 boe/d.
AMEXHI said since the reform as of April, Mexico’s private oil industry has invested $9.629 billion in upstream activity, and Mexico’s Fondo Mexicano del Petróleo, a sovereign wealth fund created under the reform, had collected $1.87 billion.
The group said 140 exploration, appraisal, and development plans approved so far by CNH call for combined investment of $36 billion over the coming years.
AMEXHI has called repeatedly on López Obrador to reactivate upstream bid rounds, which the government has suspended indefinitely.
Other private sector projects expected to contribute output over the coming years include the shallow water Hokchi field, where operator Pan American Energy LLC obtained approval in 2018 for a $2.5 billion development plan that includes seven producing wells and seven injector wells, along with an onshore oil and gas processing facility.
In February, CNH approved a $7.6 billion development plan submitted by Fieldwood Energy E&P Mexico S de RL for the Ichalkil and Pokoch shallow water fields. Fieldwood and joint venture partner Petrobal SAPI de CV plan to drill 19 production wells at the block from 2021-2040.
The crown jewel of the rounds to date is the Zama discovery, part of shallow water Area 7, which CNH awarded to a consortium led by Talos Energy in 2015’s round 1.1. Talos is aiming for a final investment decision at Zama by the end of 2020 depending on whether it canreach a unitization agreement with Pemex, which operates an adjacent block.
Meanwhile, Reuters reported that Pemex is seeking to wrest operatorship of Area 7 from Talos, citing two former Mexican energy officials and two Pemex officials. Neither Talos nor Pemex has publicly confirmed the allegations.
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