Following Carlos Treviño's, Pemex CEO, announcement of two new discoveries, Manik-101A and Mulach-1, in Mexico's shallow water opposite Tabasco state,
Adrian Lara, Senior Oil and Gas Analyst at GlobalData, a leading data and analytics company, offers his view on the impact on the upstream sector:
“The announcement of these discoveries seems too opportune after the recent statements made by the transition team with respect to injecting more capital to the NOC. It is as if Pemex was creating momentum and indirectly telling the new government which are the projects where additional resources are needed, or where to focus the new contracting schemes for awarding oilfield service contracts. During the session, Carlos Treviño was very careful not to talk about farm outs or bidding rounds and repeatedly emphasized how viable these projects are for adding production in the next two years.
“Besides the two announced discoveries, there are four other fields which are being appraised or transitioning into production phase. All together, these six fields are considered to potentially produce up to 210 thousand barrels per day (mbd) and could recover beyond 800 million barrels of oil equivalent (mmboe) in reserves. The total investment is in the order of US$8 to 10bn, as indicated by the Pemex executives during the Q&A session.
Lara continues: “Nonetheless, an addition of 210 mbd by end of 2020 seems too good to be true given the production decline and the challenges Pemex has had to concrete planned offshore farm outs. To begin, the investment budget for developing the new discoveries still needs to be approved by congress this next December. Then for the other four fields, the financing will likely come from a mix of Pemex resources and possibly some of the new contracting schemes proposed by the transition team, but there is no practical evidence yet on how this will evolve. On top of this, the pace for developing these projects can be influenced by how the new administration, which probably will replace some key Pemex executives, favours and directs these opportunities.”