Data on rising oil output comes amid surge in 2020 well approvals

Mexico’s hydrocarbons regulator CNH has been meeting almost daily recently to assess oil plans for 2020, issuing guidance and approvals for over a dozen projects.

Amid the modifications and approvals, CNH also released September oil output data, adding to the case that struggling national oil company Pemex is, despite all doubts, lifting oil output. 

Last month, national oil output rose to 1.71Mb/d. It was the fifth straight monthly gain in output; oil production has increased by 3.3% since May. 

Continuing the trend would put national oil company Pemex, which accounts for the vast majority of Mexico’s output, on track to finish 2019 with an increase in output over 2018, thus halting a 14-year streak of annual output declines. 

On a smaller scale, private hydrocarbons association Amexhi recently forecast that private firms will produce 50,000b/d by year-end. In June, operators produced 39,000b/d.

Key to this rise has been rising output from Italian energy firm Eni, which recently started extraction at the Miztón field in water depths of 34m, off the coast of Tabasco state. It won access to the field in Round 1.2 in 2015. 

Eni's output at the field nearly doubled in August, reaching 9,431b/d.

IMPORTANT CNH APPROVALS FOR 2020

DS SERVICIOS

Among the most significant private sector approval, CNH okayed DS Servicios' plans for the drilling of 39 wells at the 1,569km2 Ébano field next year. 

In addition to the wells, nine major repairs will also be done at Ébano, in addition to 50 minor repairs. 

DS Servicios holds 54.99% participation in the site, with Pemex Exploración y Producción (PEP) holding 45%.

The site of Mexico’s first major oil discovery, the field is in the Tampico-Misantla basin, which according to data recently published by CNH, remains one of the most promising oil and gas areas in the country.

SHELL, TOTAL STUDIES

A number of other private firms recently gained project approvals. For example, Shell’s plans for exploration at the Mission field, northwest of the city of Reynosa, received CNH backing.  

In 2020, Shell will undertake geological studies and drill two wells for US$7.16mn.

Total also received CNH approval for a set of exploratory studies, including 3D seismic information reprocessing, in shallow waters off Tabasco that it shares rights to with PEP under CNH-R03-L01-AS-CS-06/2018.

Total expects to spend US$25.1mn on studies at the Macuspana and Salina offshore sites in 2020.   

CLARITY OVER PARTNERSHIPS 

Several proposals considered by the regulator in recent weeks have been incomplete, leading CNH to table them or append recommendations. 

Last week, CNH refused to vote on a PEP plan for abandoning the Tumut site because PEP had yet to finalize an agreement to share infrastructure for gas transit with Fieldwood Energy to take place from 2020-2023.   

Then, on Thursday, CNH approved for US-based Talos Energy's request to develop an offshore site associated with assignment CNH-R01-L01-A7/2015.  

But a lack of clarity about which operator, Talos or PEP, its partner at the site, will be drilling which well led the commissioners to call for clarification. 

“When there is a suspicion that there is a shared well, you need a pre-approval,” commissioner Alma América Porres said. 

 

Source: National Hydrocarbons Commission