Pemex to Sign Mixed-Production Contracts

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Pemex plans to sign at least seven new mixed contracts by the end of this month, according to El Economista. The deals, set for announcement by 26 September, will allow operations for 20 years.

The assets hold over 1 billion barrels of oil and 980 billion cubic feet of natural gas reserves. With these contracts, Pemex anticipates drilling 435 wells.

Approximately 82% of the oil reserves pertain to the Kayab-Pit-Utsil project located in shallow waters offshore Campeche. Other blocks involved are Tupilco Terciario and Tlatitok-Sejkan.

These new mixed contracts will leverage private funds into Pemex's operations. The state company will retain a minimum 40% stake in the projects, while private companies will serve as the operators.

This strategy also seeks to boost Mexico's declining hydrocarbons production. Over the past two decades, Pemex's output has steadily declined from 3.38 million barrels per day (BBL/d) of oil in 2004 to about 1.7 million BBL/d in 2019, following the natural decline of mature fields and the failure to replenish those barrels with new developments.

The previous administration of Andrés Manuel López Obrador was able to arrest Pemex's decline in oil production and boost it to 1.87 million BBL/d in 2023, with condensates accounting for 287,000 BBL/d.

However, a recent report by the International Energy Agency (IEA) suggests that Mexico risks a drop in production of 680,000 BBL/d by 2030 due to curtailed investments and natural declines.

The government of Claudia Sheinbaum has pledged to maintain Pemex's production near the 1.8 million BBL/d mark during her mandate.

However, in the first seven months of this year, Pemex, by far the nation's largest producer, has maintained an output of 1.62 million BBL/d (condensates of 258,000 BBL/d), compared to the 1.79 million BBL/d (condensates of 278,000 BBL/d) recorded during the same time last year.

Without the development of new projects, Pemex and Mexico risks more production declines in the coming years.

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