Mexico's oil and gas output falls in July

Mexico's output of crude oil fell to 1.56Mb/d (million barrels per day) in July, down 4.7% from the same month last year, according to figures released by hydrocarbons regulator CNH on Thursday.

Including condensates, production was down 4.5% to 1.83Mb/d.

There was an even steeper fall in natural gas output, which dipped 14% to 3.69Bf³/d (billion cubic feet per day).

According to the figures, 95% of the country's oil and gas is produced by national oil company Pemex.

Mexico's oil production peaked in 2004 at nearly 3.4Mb/d. It has fallen sharply since then, mainly because of declining output at giant fields such as Cantarell and Ku-Maloob-Zaap.

The country's output of natural gas peaked in 2009 at 6.5Bcf/d. 

Source: CNH

The latest figures show that increasing natural gas production at recent discoveries such as the Ixachi field, which was discovered in 2019, has not been enough to offset declines elsewhere.

Pemex is laboring under a debt burden of nearly US$100bn. Under the administration of outgoing President Andrés Manuel López Obrador, the company has focused more on downstream projects, such as the recently inaugurated Olmeca refinery, than on upstream investments.

To stabilize and increase oil and gas production under president-elect Claudia Sheinbaum, analysts say that Pemex will have to team up with private oil companies to explore new areas.

Lakach changes

Also Thursday, CNH approved a US$400mn increase in Pemex's plan for developing the deepwater Lakach field in the Gulf of Mexico. The project will now cost US$2.2bn from 2024 to 2041. 

Under the new design, gas from Lakach will be processed for sale at an onshore plant, rather than on an offshore platform as was previously planned.

Pemex is developing the field with Grupo Carso, the conglomerate owned by Mexican billionaire Carlos Slim.

Gas production will begin in 2026. Lakach will be Mexico's first deepwater field to start production.  

A previous agreement between Pemex and US energy company New Fortress Energy to develop Lakach collapsed in 2023.