EXCLUSIVE: Mexico’s Pemex destroyed $342 million worth of resources from two major fields

MEXICO CITY (January 18) (Reuters) – Mexico’s state oil firm Pemex illegally burned hydrocarbon assets price greater than $342 million within the three years to August 2022, inside paperwork launched by the nation’s oil regulator present, at two of its most vital fields. new.

The three paperwork, launched by the regulator and dated August 2022, present how Pemex (PEMX.UL) destroyed assets price $275 million from the Ixachi area in three years and $67 million from the Quesqui area in two years.

To calculate the worth, the regulator used costs from personal contracts to market these hydrocarbons.

Neither Pemex nor the Vitality Division responded to requests for remark.

Late final yr, Pemex stated it will halt the observe of flaring gasoline at Ixachi after Reuters studies of improvement plan violations on the two fields and associated fines.

Below strain to satisfy formidable manufacturing targets by Mexican President Andrés Manuel López Obrador, he has been repeatedly fined by the oil regulator for breaching his commitments to develop the Ixachi and Quesqui fields.

Plans for exploration and manufacturing of pure gasoline and different hydrocarbons have been authorised within the southeastern states of Veracruz and Tabasco – and are chargeable for making certain compliance.

Flaring of gasoline and condensate – a mix of liquid hydrocarbons much like very mild crude oil – has additionally triggered widespread environmental harm.

Reuters reported final yr that Pemex was Burning gasoline excessively all through the worldhowever the destruction worth has not been reported earlier than.

Mexico – the world’s eighth largest gasoline operator – is underneath rising strain, together with from the USA, to cut back the observe and its methane emissions.

Managing emissions is about to develop into tougher as fields age and the world’s most indebted oil firm lacks the funds to improve ailing infrastructure.

In Ixachi, the devastation was notably dramatic as a result of manufacturing had begun a yr earlier. There, paperwork present that Pemex burned about 62.9 billion cubic toes of gasoline and 310,000 barrels of condensate.

This equates to 31% of the full quantity of gasoline produced from the sector, and 1.3% of the full condensate, in response to Reuters calculations.

The paperwork had been despatched to the nation’s power minister, Rocio Nahle, head of regulatory compliance at Pemex’s exploration and manufacturing arm, and senior officers on the regulator and the inside ministry.

The infrastructure is lacking

Pemex produced 201.2 billion cubic toes of gasoline and 24.3 million barrels of condensate from Ixachi. But it surely nonetheless falls wanting reaching its targets.

The paperwork additionally present that 77.6% of the funding within the area Pemex pledged in its improvement plan – totaling $2.9 billion – has not been carried out.

López Obrador introduced early in his presidency that Ixachi and Quesqui fashioned a part of 17 new precedence fields anticipated to considerably enhance nationwide manufacturing as a part of a broader effort to make the nation power impartial.

The fields had been presupposed to obtain extra assets in order that Pemex may start exploration and manufacturing earlier and rapidly and make up for decrease manufacturing from older fields elsewhere.

However Pemex failed to finish the wells, pipelines and different infrastructure wanted to supply gasoline and condensate from the fields with out excessive ranges of waste.

At Ixachi, worth destruction from condensate burning was greater than $21 million in three years; On Quesqui, it was almost $8 million in two years, paperwork present.

No condensate burning has ever been reported within the fields. Below Mexican regulation, documentation of such abuses isn’t made public.

One of many paperwork stated: “The aim needs to be to maximise the utilization of all hydrocarbon merchandise on this area,” including that “(Pemex) doesn’t fulfill the manufacturing it has dedicated to as a result of the wells and infrastructure don’t exist.”

Within the paperwork, the regulator additionally recommends adjustments in order that Pemex avoids “burning and destroying the business worth of hydrocarbon merchandise.”

Traditionally, Pemex has thought-about investing in gasoline exploration and manufacturing infrastructure to be too costly and has as a substitute imported a lot of it from the USA.

Lately, it has come underneath strain due to the environmental harm related to gasoline flaring.

Late final yr, Pemex acknowledged in its up to date 2023-2027 marketing strategy that its poor environmental, social, and governance (ESG) document threatened to harm its financing as rivals had been shifting sooner to scrub energies.

(Reporting by Stephanie Eschenbacher) Enhancing by Stephen Eisenhammer and Lisa Shumaker

Our requirements: Thomson Reuters Belief Ideas.

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