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Results for this year’s first half compared to last year’s showed the Mexican company’s struggles continue, but top executives seem optimistic about the future.
Despite E&P projects that exceeded expectations, most notably the prolific Kunah-1 well, the showings weren’t enough to help lift Pemex from a net income loss of about US $723 million so far this year, compared to last year’s first half (1H).
Crude oil production decreased slightly, but natural gas production dropped even more when the Mexican national oil company compared statistics for the 1H 2012 to the same period last year. Crude oil production dropped to 2,538 b/d from 2,565 b/d last year, while natural gas production sank to 5,708 MMcf/d compared to 6,052 MMcf/d.
Speaking during the July 27 webcast of the company’s 1H 2012 preliminary results, Pemex CFO Ignacio Quesada Morales described recent volatility in the financial market that has impacted oil prices as well as the natural gas scene.
According to Morales, that volatility in addition to a slowdown of the global economy caused by unrest in Europe, amid other reasons, had a negative impact on crude oil prices. However, with today’s firmer prices, the company has “good expectations” in the near term, he said.
On the other hand, Morales pointed to the continued downward trend in natural gas prices due to an oversupply caused by North America’s shale gas development and additional capacity that has come online. Those reasons coupled with one of the mildest winters the region has seen in decades have had an impact.
Fluctuation in the exchange rate also showed volatility, affecting the company’s bottom line, he said.
Turning to upstream operating results, Carlos Morales Gil, the company’s E&P director, mentioned several delays in contracting and well completions in some areas that were offset by increased production and exploration in other areas. Total hydrocarbons production reached 3,687 boe/d.
The company reported a 37% increase in production for its ATG project, also known as Chicontepec. Gil also touted the Kunah-1 well northeast of Veracruz. The well, which was drilled to 2,157 m (7,070 ft), had an initial production of 143 b/d of crude and condensates and 33.9 MMcf/d of gas.
“Kunah-1 has proved to be the most productive well today in Mexican deep waters,” Gil said.
Other main discoveries made during the 1H 2012 include the Burgos project in which the Percutor-1 well showed an initial production of 2.171 MMcf/d of dry gas; the Habano-1 well, 27 b/d of crude and condensates, and 2.771 MMcf/d gas; and Veracruz’ Gasifero-1, with 920 b/d of light crude oil and 0.3 MMcf/d gas.
Meanwhile, work is continuing to boost production in mature fields. “We hope to continue to diversify our production sources with integrated contracts,” Gil said.
Pemex recently awarded a second round of integrated contracts for prospective resources in Altamira, Panuco, Tierra Blanca, and San Andres. Combined, production for the four areas totaled 7,000 b/d.
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