Page 18: of Offshore Engineer Magazine (May/Jun 2013)

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EPIC

Editor’s Column

Colloquy

Nina Rach

Changes loom in Mexico

The structure of the Mexican oil the extra-heavy crude will be dif- The US supplies the vast majority industry is on the verge of change, fcult to produce and market. The of gas to Mexico, but the country also

T driven by a need to increase reve- feld does contain some areas of light imports LNG from Nigeria, Qatar, In- nues and build reserves. The consen- and superlight crude. Production donesia, Peru, and Yemen. US natu- sus is that Mexican felds are aging, volumes are still small, reported as ral gas exports to Mexico reached a production is declining, and al- 68,000bo/d in May 2012. The feld record high in 2012, to 1.69Bcf/d, a though Petróleos Mexicanos (Pemex) has probable recoverable reserves of 24% increase from the year before, has a monopoly in the business, it 17.6 billion bbl, but could require coming from Texas, California, and is hamstrung by years of under 20,000 wells to exploit. Arizona.

investment in long-term development At the PECOM conference in 75 years projects. Villahermosa in April, discussion

Pemex is designated as the exclu- suggested that the new government Earlier this spring, Mexico marked sive operator in Mexico, forbidden might pull the plug and decide the 75th anniversary of the nation- by the Mexican constitution and against fully funding Chicontepec alization of its petroleum industry. constrained by other laws from form- development. Since they were unceremoniously ing joint ventures or equity contracts exiled in the March 18, 1938 na- “We must make with foreign frms, so it is effectively tionalization of Mexico’s oil felds, cut off from the expertise of IOCs. international oil companies have hydrocarbon

Mexico’s petroleum production been unwelcome in the country. And extraction more is declining. The most prolifc feld, companies whose investments have

Cantarell, produces almost two been expropriated have been loath to effcient… million bo/d. The estimated peak reinvest, especially without a large,

This is a business, output of the fve next-largest felds, upside potential. IOCs want to be combined, do not equal Cantarell’s able to share production and book not a sport.” output. They are: reserves.

Ing. Jose Luis Fong, PEP n Ku-Maloob-Zapp (KMZ) ~794bo/d. Several PECOM speakers noted n Chicontepec 393bo/d. that there is still strong social and n Crudo Ligero Marino 230bo/d. political opposition to working with

Historic US partner n Agua Fria 173bo/d. Mexico is an important energy part- international oil companies. The rea- n Antonio J. Bermudez 161bo/d. ner with the US. According to the US sons include the ostensibly popular

All of the major Mexican felds Energy Information Administration desire to protect national patrimony, are mature or declining, except for (EIA, February 2013), Mexican felds government reliance on PEMEX tax

KMZ, which, along with Cantarell, produced 3.2MMbo/d in 2008, but revenues and largesse, unionized oil produces predominantly heavy oil. dropped nearly 10%, to 2.9MMbo/d workers, and gasoline price subsidies

Mexico used to export light oil, and in 2012, still ranking eighth among beneftting Mexican consumers. Per- its refneries are geared for light oil. the world’s oil-producing countries. haps there is a lingering sensitivity

The country must now import light The country remains a net exporter to Spanish imperialism, as well.

oil to blend with the local heavy oil of oil, but has become a net im- These circumstances don’t natu- production. porter of natural gas, mostly from the rally promise success, but there is

Hopes were pegged on develop- US via pipeline. Mexico has been already a shift in government rheto- ment of the Chicontepec feld, but increasing the use of natural gas for ric. Mexico’s new president, Enrique plans have been criticized because power generation. Peña Nieto, of the Institutional Revo-

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