Mexico’s finance ministry has revised the country’s crude oil production rate for the year by 129,000 bpd less than previously expected. Instead of 1.8 million bpd—the target set by President Claudia Sheinbaum—Mexico is seen producing 1.762 million bpd, Reuters reported, citing the ministry.
Production next year, however, is expected to rise to 1.775 million barrels daily as a result of “development of new strategic projects and the eventual incorporation of additional fields if exploration proves favorable,” the finance ministry said.
Mexico has been trying to stem a natural decline in its crude oil production for years now, but success has been elusive. Over the first two months of this year, state-owned Pemex, along with its partners, produced an average of 1.62 million barrels of crude daily, which was palpably lower than the Mexican president’s production target.
Late last year, the company’s management revised its budget down, which could prove an additional obstacle to boosting production. The cutback follows instructions from Pemex’s new upstream head, Nestor Martinez, to scale back major well repairs and seismic data contracts. Instead, Pemex will focus on developing new deposits, especially in the deep waters of the Gulf.
On top of the production problems, there was recently an issue with the quality of the oil that Mexico does produce. Gulf Coast refiners found some of the Mexican crude they were receiving contained a lot more water than it should, at up to 6%, which is six times higher than the maximum accepted level.
Pemex chief executive Victor Rodriguez acknowledged the problem, saying complaints have been made by buyers, citing high water content and also high salt content in the crude. “We don’t have problems in Pemex or with oil production, these are situations that occur and have occurred historically,” Rodriguez told Reuters in March. Since then, the issue has been resolved, according to official reports.
Source: By Irina Slav from Oilprice.com