During the first three months of Mexico’s new administration (December, January, and February), there will be less oil and natural gas available in the country in comparison with the six-year term that ended on November 30 .
A report delivered by Mexican Petroleums (PEMEX) to the new government one day before the presidential inauguration of Andrés Manuel López Obrador revealed that oil and gas extraction from the country’s 16 main fields , developed through their branch PEMEX Exploration and Production (PEP) , were expected to drop considerably.
During the first 90 days of the new administration, the data delivered by the state-owned oil company has shown that, during the first 90 days of the new administration, production levels are expected to reach an average of 1.59 million barrels a day , which is 171.7 thousand barrels less than what was produced in October of the present year.
In said month, extraction levels obtained at the most productive oil fields reached an average of 1.76 million barrels a day, meaning that, between October and the first 90 days of Mexico’s new government, there will be a production drop of approximately 10.7% .
Regarding natural gas, there will be a considerable reduction in the fields of Ku-Maloob-Zaap and Cantarell , which are the main producers of this type of fuel. Their platform production will be reduced by 1.7% and 10.1% each .
A part of the problem lies in the natural decay of the fields, according to the PEP investigation, since their long-lasting exploitation has largely exhausted said sources.
PEMEX’s operational reports in the month of September of the present year referred to a decrease in natural gas extraction levels which was allegedly unrelated to the natural decline of Burgos and Veracruz assets.
Furthermore, the decrease in gas production mainly occurred in the Abkatún-Pol-Chuc, Coast of Tabasco, Bellota-Jujo, Samaria-Luna, and Macuspana-Muspac assets , which are known to have suffered a natural decline in their fields and have registered an increase of water within caves, which damages the quality of the hydrocarbon.
However, exploration and production activities in PEMEX were mostly affected by financial restriction .
According to reports sent by PEMEX to the Mexican Stock Market (BMV) , the PEP has experienced a relevant investment setback in said activity since 2014 , when it served 301.7 billion pesos (USD$14.87 billion as per the current exchange rate) .
By 2017 , said figure fell to 162.6 billion pesos . This year, however, the company programmed 168.4 billion. This means that, in six years time, money destined for the most important and lucrative activity of Mexico’s oil industry dropped 44.1% .
Nevertheless, the new government’s budget assignation assumes an increase of 12% in resources, which will be one of the first challenges for President Andrés Manuel López Obrador regarding the oil industry.
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