Mexico energy watch: Emissions targets, Pemex onshore exploration

Mexico will miss the 2030 carbon emissions targets it committed to under the Paris Agreement if current trends and regulations continue.

During the COP27 summit in Sharm El-Sheikh, Egypt, the chairman of think tank Iniciativa Climática de México (ICM), Adrián Fernández, said the targets will be missed if the policy course does not change by early 2023.

According to ICM, Mexico's energy sector needs to rapidly reduce its emissions targets by slashing methane emissions, reducing gas flaring and increasing the efficiency of its power usage.

In particular, oil and gas giant Pemex could strike deals with private players to invest in efficient cogeneration plants, which can provide electric power and heating through a single generator that is more efficient than other thermoelectric alternatives.

Mexico could also adopt green hydrogen, according to ICM, given its great potential to produce the fuel. Earlier this week, public utility CFE gave the first signs it was looking into hydrogen production, at a time regional peers like Chile and Brazil have made long-term commitments regarding the green fuel.

Mexico could also accelerate the development of renewable generation power plants and encourage the retirement of old, less efficient thermoelectric units, like Chile has done in recent years, to clean up its energy sector. 

The recommendations are contrary to current energy policy, which has involved expanding natural gas generation and local refining capacity while making deployment of renewables harder.

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Federal oil company Pemex will invest additional time and resources in its Cuichapa field straddling the states of Tabasco and Veracruz.

During an extraordinary session, hydrocarbons regulator CNH approved an US$88mn investment to further explore the area after promising initial results.

Pemex plans to spud two wells initially and conduct seven exploratory studies. If results are encouraging, it could spud three additional wells, CNH said.

Meanwhile, during the session, Shell Exploración y Producción received approval to renounce its G-CS-04 field off Campeche state. 

Repsol México was also cleared to renounce three areas, CM-G01, CM-G05 off Veracruz and Tamaulipas and A11.CS off Tabasco. Generally, areas are renounced and returned to the State when no commercially recoverable hydrocarbons are found.