Pemex widens loss amid reform push

Feb. 27


Pemex results: Profits, oil production down as company looks to reform

Pemex sunk to a wider fourth-quarter loss as the company stands on the brink of reform that will open its oil industry to private competition for the first time since 1938.

The Mexican state oil company booked a net loss of 76.5 billion pesos ($5.9 billion) in the three months to December, compared with a narrower loss of 28.8 billion pesos in the year-ago period.

Revenue was down 2.6% to 409.5 billion pesos ($31.3 billion).

Total crude-oil production was down 1.5% for the quarter to 2.523 million barrels per day, Pemex said.

This was due chiefly to natural declines in light and heavy crude production in fields including Cantarell and at the Delta del Grijalva project in the southern part of the country.

"Pemex faced operating challenges in its exploration and production activities that nowadays have become characteristic for the industry worldwide, including greater complexity, decreased volumes and higher technological and capital requirements," the company said.

Pemex is hoping that constitutional reforms passed last year allowing private participation in the sector will bring in new partners and technology to help boost declining production at old fields and accelerate development in shale and deep-water reserves.

Secondary legislation is presently being crafted in Mexico's congress to implement the reforms.

Natural gas production was up by 1.6%, however, due to increased production of associated gas at the Ku-Maloob-Zaap, Abkatun-Pol-Chuc and Bellota Jujo fields.

Pemex said it had coaxed higher oil flows from seven horizontal wells brought online in the fourth quarter at the project formerly known as Chicontepec.

The Mexican state company said the wells from the Aceite Terciario del Golfo (ATG) development came online at an average of 500 barrels per day and had stabilised an average production of 200 bpd.

That compared favourably to average conventional production in the area of between 20 and 30 bpd.

"The higher productivity of these horizontal wells is due to a strategy based on creating multiple fractures, equal to or above 10 fractures," Pemex said.

Rig and completion counts were also down from the year-ago quarter, with completions at 187 compared to 344 a year ago.

Its rig count had 117 rigs active, with 21 on exploration and 96 on development, compared to 153 in the fourth quarter of 2012.

Pemex also acquired new seismic data in the fourth quarter in its quest to develop Mexico's potentially significant shale reserves, with 525 km of 2D picked up in the Burgos basin and 609 km in the Southeastern basin.

Source: http://www.upstreamonline.com/live/article1353765.ece?