Mexico NEWS

Mexico’s Pemex reduced losses during the second quarter even as crude prices fell during the coronavirus pandemic. The 44.3 billion peso net loss during the April-June period was over 16% lower than the nearly 53 billion pesos Pemex lost in the same period last year. During the quarter, Pemex’s financial debt rose nearly $2.4 billion to $107.2 billion, one of the largest of any oil company worldwide.

Mexico refused to extend a cut in oil production to the end of July which was agreed by OPEC members and other key producers. The OPEC and its allies agreed on Saturday to extend through July the historic output cuts for May and June. But during a visit to a petrochemical plant in Veracruz state, Energy Minister Rocio Nahle told reporters that Mexico would not comply.

Mexico-based company Libre Abordo announced that it was bankrupt. Venezuelan President Nicolas Maduro also ended an oil-for-food agreement that had allowed the firm to supply water trucks in exchange for millions of barrels of Venezuelan crude. The Mexican companies proclaimed that they were targets of an international political campaign, driven by the U.S., which had led to a loss of over $90 million and the suspension of Venezuelan crude lifting.

After more than nine hours meeting on Thursday, OPEC and its allies have settled for historic agreement with an exception. The group has decided to take 10 million barrels per day off the market to which Mexico hasn't given the consent. The statement by OPEC read "agreed by all the OPEC and non-OPEC oil-producing countries participating in the Declaration of Cooperation, the agreement is conditional on the consent of Mexico".

Mexican state-run Pemex has commenced signing contracts with oilfield service firms specifically invited for submitting regarding a new batch of priority E&P projects. Octavio Romero, CEO, Pemex, who was speaking on the sidelines of an energy event in Ciudad del Carmen, informed that the closed bidding process allows Pemex to save on costs. Romero foresees all the contracting for this year's projects to be concluded by the middle of 2020.

Mexico government is trying to solve a dispute over fees and payments. Working on this, the government has reached a deal with private gas pipeline operators. Nation's President has slammed the private companies for taking unfair advantage of the of the country. "We avoided a dispute that would have implied going to international tribunals, a dispute that would have taken years to resolve", said Mr President.

Oil prices on Friday were buoyed by the chances of delay in trade tariffs on Mexico by Washington. The prices jumped by more than 1% and were supported by the signs of supply cut extension by OPEC and other producers. Brent increased by 0.8% and was traded at $62.17 a barrel. WTI rose by 1% and was traded at $53.09 per barrel.

Mexican state oil firm Pemex has reported a decline in its oil exports in April. Its oil exports dropped by 11% compared to the statistics of the previous month. The production of the company also went down by 0.9%. The company is also struggling because of the debts of almost $106 billion. President of Pemex has assured the recovery of the company by increasing the production at least by 50%.

US' Talos Energy has successfully completed drill stem test (DST) of the Zama-2 side-track well (Zama-2 ST1) in Block 7, Mexico. Talos has 35% operating interest in Block 7 and the rest are held by Premier Oil (25%) and Sierra Oil and Gas (40%). During the DST operation, a combined flow rate of 7,426 barrels of oil per day was achieved from two separate tests.

Netherlands-based Ampelmann has inked its first contract in Mexico for providing offshore access services. With the award of this contract, Ampelmann has added a new region in its portfolio. The Dutch firm has deployed its fully motion compensated A-type system in Mexico, mobilised on a flotel. The system will enable safe transfer of personnel from vessels to offshore platforms, and back.

In a major acquisition move, Indonesia’s Medco Energi has settled to acquire London-based Ophir Energy in $511 million. Medco’s recent offer followed the previous offer of $437 million which Ophir rejected stating that it undervalued the company. The Jakarta-based oil and gas group is looking to expand its reach to international assets. Post-acquisition, Medco will gain rights to assets in Tanzania and Mexico.

The Mexico pipeline explosion on Friday has so far claimed 85 lives, according to a Minister. In a news briefing, Security Minister Alfonso Durazo told the reporters that state-owned Pemex considered the leak “minimal”, and did not shut the gasoline pipe despite an early warning from the military. Officials said that dozens of bodies were so badly charred that they will have to resort to DNA testing for identification.

An explosion in a ruptured pipeline burnt many people trying to fill containers with fuel in central Mexico yesterday. Television footage showed flames blazing from the burning pipeline in the municipality of Tlahuelilpan. State governor Omar Fayad denied knowledge of any deaths, but said that he had received reports that “many people” suffered burn injuries in the explosion.

Qatar Petroleum (QP) yesterday entered into an agreement with Italian energy multinational, ENI to acquire stakes in three oilfields, offshore Mexico. Briefing at a news conference in Doha, QP CEO Saad al-Kaabi informed about QP acquiring 35% stakes in in the Mexican oilfields. Production at these fields is projected to commence by mid-2019, which will be then ramped up to 90,000 bpd by 2021.

Mexico’s newly elected President yesterday revealed plans of constructing an $8 billion oil refinery and to renovate six others in a bid to lower Mexico’s dependence on imported fuel. Lopez Obrador, who took the President’s office in Dec, is looking to finance $3.65 billion for the state-owned oil major, Pemex. In 2018, Pemex has produced less than 1.8 bbpd of crude, heading towards 14th consecutive year of declining oil output.

Mexico-based Sierra Oil & Gas has inked an agreement with German E&P firm, Deutsche Erdoel AG (DEA AG) to integrate its business with DEA AG’s wholly-owned subsidiary, Deutsche Erdoel México. The integration will expand DEA AG’s portfolio in Mexico to ten exploration blocks and one onshore production block. The transaction is estimated to be completed during the first half of 2019.

Shell’s subsidiary, Shell Exploration and Production Company has awarded a contract to McDermott International, Inc. The contract is for new subsea umbilical and flowline installation at the Great White Frio development in Alaminos Canyon Block 857 in the U.S. Gulf of Mexico. The scope of work includes, project management and engineering along with installation of one 2,000-ft steel flying lead, installation of two EFLs and various other services.

McDermott International has secured a contract for concept and engineering services for Talos Energy's Zama field project. McDermott will manage this contract with io oil & gas consulting, a JV between McDermott and BHGE. The EPC giant will provide the follow-on pre-FEED services, based on the final concept solution identified by io. Work is expected for completion in 3Q2019.The Zama development is the first offshore Mexico block awarded to a private operator.