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Mexico’s Private Oil Output Slides As Delays Plague Italy’s ENI

Production by private companies in the country dropped in June, impacted by a drop in output at the Italian company’s oilfields

Oil production declines by Italy's ENI and Argentine company Hokchi Energy contributed to Mexico's private output falling below 100,000 barrels per day in June
August 01, 2022 | 12:00 pm

Mexico City — Oil production by private companies in Mexico dropped 3% in June compared with the previous month, and which was impacted by a decline in the output of Italy’s Ente Nazionale Hidrocarburi (ENI), according to data from the country’s hydrocarbons commission CNH.

June crude production totaled 97,852 barrels per day, 3,200 barrels per day below the record 101,000 barrels per day produced in May. However, year on year, production climbed 40%.

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ENI has faced problems within its contracted area, in which the offshore Miztón, Amoca and Teocalli fields are located, particularly with reservoir pressure and the lack of a vessel to stabilize it, a situation that CNH president Rogelio Hernández Cázares has described as being due to possible damage to the field.

The Italian company announced the arrival of the vessel Miamte at the beginning of 2022 and started production at Amoca during February.

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Argentine company Hokchi Energy also saw its production drop in June, down by almost 1,000 barrels per day compared with its May output.

The private sector contributes 6% of total oil production in Mexico, while state-owned company Pemex contributes the remaining 94%, as a result of the opening up of the sector as part of the 2013 energy reform during the administration of former president Enrique Peña Nieto.

But the arrival to the presidency of President Andrés Manuel López Obrador in 2018 halted further auctions of oil blocks and set a goal of 280,000 barrels per day to private oil companies by the end of his six-year term in 2024.

Oil companies have failed to reach their annual targets since 2018, with the CNH forecasting production would remain below that target, although the companies have insisted that they will achieve the goal, despite having revised their output estimates downward.

The Mexican Association of Hydrocarbon Companies (Amexhi) acknowledged in April that private companies are facing production delays, and expect to set new goals during the second half of 2022.