Mexico´s Pemex aims to increase crude and gas production during the second half of 2020 as it pushes forward with its strategy of early production at exploratory wells and the commitments to production cuts with OPEC expire.
Pemex will increase crude production by 95,300 b/d by the end of the year as it incorporates 20 new exploration wells, management said July 28 during the company´s Q2 conference call. Eighteen of the new projects contain crude only and two more will also produce natural gas.
The firm already started production in 15 new wells in the first half of the year, which the company has identified as priority to reach its production goal of 2.4 million b/d by 2024. The wells have so far produced 83,000 b/d of crude, Alberto Velazquez, CFO said.
Drilling at these priority fields will increase the firm´s 2020 capex to $7.8 billion from $4.9 billion in 2019, Velazquez said.
Total hydrocarbons production in the second quarter was 2.359 million boe/d, a slight year-over-year decrease mainly explained by lower associated gas. Crude production remained unchanged at 1.673 million b/d between April and June.
“The steady production is explained by higher production in offshore fields, mainly at Xanab, which increased production by 30,000 b/d to 82,000 b/d,” Velazquez said.
Pemex called Q2 production a “favorable achievement” considering a 100,000 b/d output reduction Mexico committed to as part of an April deal with OPEC+ members that expires in July. The firm also mentioned bad weather had caused the shutdown of operations during seven days in June.
Total gas production of 3.604 Bcf, was 52 MMcf ,or 0.9%, lower year over year as associated gas decreased by 118 MMcf due to the shutting of wells as part of the OPEC+ agreement. Non-associated gas increased by 9%, or 85 MMcf, Pemex said in its report to the Mexican Stock Exchange.
The number of wells in operation decreased 9% to 6,789, Pemex said.
Pemex reported a net loss of $1.9 billion in the quarter, hit by lower revenues and lower crude prices. Total revenues dropped 51% to $7.9 billion on the back of local sales that were 54% lower year over year and lower exports. The price of the Mexican export mix during the quarter was 60% lower at $23.84, Pemex said in its filing.