Private Oil Companies In Mexico Fall Short of Production Targets for 4th Year Running

Private companies reported production of 102,750 barrels of crude oil per day in 2022

Hokchi Energy fuel storage tanks.
January 23, 2023 | 06:35 PM

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Mexico City — Private oil companies operating in Mexico failed for the fourth consecutive year to meet their oil production target during 2022, according to the most recent data from the National Hydrocarbons Commission (CNH).

The volume extracted at the end of December was 102,750 barrels per day of crude oil, 49.2% or 106,200 barrels per day less than the 209,000-barrels-per-day target set for the end of last year, according to forecasts by the Mexican Association of Hydrocarbons Companies (Amexhi).

Ente Nazionale Idrocarburi (ENI) and Fieldwood Energy saw production drop during 2022, despite the fact that their offshore fields Miztón, Ichalkil and Pokoch are among the most productive in the private sector in Mexico.

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The Hokchi Energy consortium, of Argentina’s Pan American Energy and Britain’s BP, saw production peak at 27,500 barrels per day in December at the Hokchi offshore field.

Private gas production closed the year at 235 million cubic feet per day, 36% or 135 million cubic feet below Amexhi’s target.

Amexhi CEO Merlin Cochran told media last year that the oil group was readying new oil production forecasts in the wake of the Covid-19 pandemic, but the group has yet to present them.

Oil production by private companies represents 6% of the national total, while state-owned oil company Pemex contributes 94% of the 1.616 million barrels daily extracted at the close of 2022.

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The government of President Andrés Manuel López Obrador’s energy policy focuses on oil sovereignty in order to be able to supply the country with its gasoline, diesel and kerosene needs without the need to import fuels from abroad, mainly from the United States.

The president’s goal is for the country to produce at least two million barrels per day by the end of his six-year term in 2024, and which is to be processed in Pemex’s seven refineries, but every year production has fallen short of those goals, or the goals have been revised downward.

In the case of the private sector, López Obrador set the goal of 280,000 barrels of oil per day before considering more auctions of oil areas, following the opening of the sector to private investment in 2013.

In 2022, Mexico registered the lowest annual production in 43 years, although Pemex has included the production of gas condensates to show a growth of its oil production in presentations to investors, but a practice that is not used in the international industry, according to analysts.