Private sector oil production in Mexico averaged 73,479 b/d in November, up from 51,907 b/d in November 2020, according to the latest figures from upstream regulator Comisión Nacional de Hidrocarburos (CNH).

oil production

The 42% year/year increase marks the highest monthly average for non-state firms since the 2013 constitutional energy reform opened the upstream segment to private investment.

Production from state oil company Petróleos Mexicanos (Pemex), meanwhile, was flat year/year at 1.58 million b/d.

The country’s total oil production averaged 1.65 million b/d, up from 1.63 million b/d in the year-ago month, CNH data show.

Total natural gas production, meanwhile, averaged 3.87 Bcf/d in November, up from 3.8 Bcf/d in November 2020.

Pemex supplied 3.67 Bcf/d of the total, up from 3.59 Bcf/d in the year-ago month.

Private sector gas production averaged 206.8 MMcf/d, versus 210.2 MMcf/d in November 2020.

Among fields operated by non-state firms, shallow water Area 2 operated by Hokchi Energy SA de CV saw the biggest y/y leap in oil production, averaging 15,875 b/d, up from 1,886 b/d a year ago.

Area 2 was awarded to Hokchi and partner E&P Hidrocarburos y Servicios SA de CV through CNH’s Round 1.2 tender conducted in 2015.

Production at the Santuario-El Golpe field operated by Petrofac México SA de CV also saw a 43% y/y increase, with production rising to 18,003 b/d from 12,601 b/d in the year-ago month.

Santuario-El Golpe is a joint venture with former operator Pemex. In December 2017, Pemex migrated Petrofac’s contract as an oilfield services provider at the field to an exploration and production contract, making Petrofac the operator.

The contract migrations and bid rounds are among the mechanisms introduced by the reform to allow private sector oil companies to compete directly with Pemex.

These tools, along with farmout tenders for equity stakes in Pemex acreage, have been suspended under President Andrés Manuel López Obrador. 

Upstream contracts awarded under the previous regime remain in effect, although the president alleges that they have taken too long to reach the production phase.

Local oil and gas trade group Asociación Mexicana de Empresas de Hidrocarburos (Amexhi) highlighted that as of Sept. 1, 31 of the 111 contracts awarded under the reform were still in the exploration phase, and that oil and gas projects can take 15 years to reach production.

The private oil and gas sector has invested about $18 billion in Mexico since 2015 and has the potential to invest another $42 billion over the coming years, the group said. 

November’s top five producing oilfields, all operated by Pemex, were Maloob (290,000 b/d), Zaap (259,000 b/d), Xanab (94,000 b/d), Ayatsil (78,000 b/d) and Onel (52,000 b/d).

Pemex also operates the five leading natural gas producing fields, which comprised Quesqui (294 MMcf/d), Maloob (288 MMcf/d), Ixachi (240,000 MMcf/d), Onel (206 MMcf/d) and Zaap (198 MMcf/d).

Dry gas production from Pemex processing centers, meanwhile, averaged 2.05 Bcf/d in November, down one-third from full-year 2016, when processed volumes averaged 3.05 Bcf/d.

Mexico relies on imports to meet more than 90% of its natural gas needs, excluding gas consumed by Pemex, according to CNH data. 

TC Energy Corp., whose pipelines move about 25% of the gas consumed in Mexico, expects the country’s gas demand to reach 12 Bcf/d by 2030, up from about 8 Bcf/d currently.