Mexico clears new Pemex offshore exploration plans

Hydrocarbons regulator CNH has approved offshore exploration plans presented by Mexico’s state oil company Pemex as well as two modifications of existing exploration and production projects.

During a livestream on Wednesday, CNH members approved the NOC’s plans to conduct exploratory studies at the AE-170-Holok block off the coast of Veracruz state. The plan involves investing US$9.6mn by 2023 in a base scenario and US$16mn in an incremental scenario. 

Four commission members voted in favor while one, Sergio Pementel, voted against the measure on the grounds that a private sector partner should be brought into the project to help Pemex succeed in a complex deepwater environment.

Besides the company’s exploration commitments, the regulator also reviewed modifications to Pemex’s production contract for the Campo Tupilco field in Tabasco state. The adjustments are aimed at increasing investment and rig activity.

According to the plans, Pemex will drill two additional wells and increase hydrocarbons extraction by 30% through secondary and tertiary recovery. The updated plans involve investments of almost US$222mn and operative expenses of US$112mn.

CNH also approved modifications to a previously approved exploration plan proposed by DS Servicios Petroleros for the M4-Ébano onshore area straddling the states of Veracruz, Tamaulipas and San Luis Potosí. The block produced 5,000b/d as of July, according to the government.

As BNamericas reported previously, Pemex has so far given low priority to deepwater developments to focus on a limited number of onshore and shallow water priority fields which were expected to lift the company’s output, in line with government expectations. However, so far the priority fields have not led to expected results.

In June, the company’s oil production was 1.61Mb/d, lower than the same month of last year. The government has therefore adjusted its message, now focusing not on increasing production but on increasing proven reserves. President Andrés Manuel López Obrador recently said his administration aims to produce just enough for national self-sufficiency, leaving unused reserves for future generations.

With the new approval, CNH has approved 60 of 64 deep and shallow water exploration plans for areas awarded during the three tender rounds between 2014 and 2018. According to the approved plans, investments are expected to grow from US$1.2bn in 2020 to US$3.1bn in 2023 in the base scenario and from US$1.8bn to US$7.7bn in the incremental scenario.

CNH rejected a modification request from Petrofac to increase investment commitments at the M2-Santuario-El Golpe block due to technical inconsistencies, but approved a request by the same company to cede corporate control on non-administrative matters of the same block to Perenco Energies International.