EXCLUSIVE: Mexico’s Pemex destroyed $342 million worth of resources from two major fields

MEXICO CITY (January 18) (Reuters) – Mexico’s state oil firm Pemex illegally burned hydrocarbon sources value greater than $342 million within the three years to August 2022, inner paperwork launched by the nation’s oil regulator present, at two of its most essential fields. new.

The three paperwork, launched by the regulator and dated August 2022, present how Pemex (PEMX.UL) destroyed sources value $275 million from the Ixachi discipline in three years and $67 million from the Quesqui discipline in two years.

To calculate the worth, the regulator used costs from private contracts to market these hydrocarbons.

Neither Pemex nor the Vitality Division responded to requests for remark.

Late final yr, Pemex stated it will halt the apply of flaring fuel at Ixachi after Reuters studies of growth plan violations on the two fields and associated fines.

Below strain to fulfill bold manufacturing targets by Mexican President Andrés Manuel López Obrador, he has been repeatedly fined by the oil regulator for breaching his commitments to develop the Ixachi and Quesqui fields.

Plans for exploration and manufacturing of pure fuel and different hydrocarbons have been authorized within the southeastern states of Veracruz and Tabasco – and are chargeable for making certain compliance.

Flaring of fuel and condensate – a combination of liquid hydrocarbons just like very gentle crude oil – has additionally prompted widespread environmental harm.

Reuters reported final yr that Pemex was Burning fuel excessively all through the realmhowever the destruction worth has not been reported earlier than.

Mexico – the world’s eighth largest fuel operator – is beneath growing strain, together with from the US, to scale back the apply and its methane emissions.

Managing emissions is ready to develop into tougher as fields age and the world’s most indebted oil firm lacks the funds to improve ailing infrastructure.

In Ixachi, the devastation was notably dramatic as a result of manufacturing had begun a yr earlier. There, paperwork present that Pemex burned about 62.9 billion cubic ft of fuel and 310,000 barrels of condensate.

This equates to 31% of the entire quantity of fuel produced from the sphere, and 1.3% of the entire condensate, in line with Reuters calculations.

The paperwork had been despatched to the nation’s vitality minister, Rocio Nahle, head of regulatory compliance at Pemex’s exploration and manufacturing arm, and senior officers on the regulator and the inside ministry.

The infrastructure is lacking

Pemex produced 201.2 billion cubic ft of fuel and 24.3 million barrels of condensate from Ixachi. However it nonetheless falls in need of reaching its targets.

The paperwork additionally present that 77.6% of the funding within the discipline Pemex pledged in its growth plan – totaling $2.9 billion – has not been applied.

López Obrador introduced early in his presidency that Ixachi and Quesqui shaped a part of 17 new precedence fields anticipated to considerably increase nationwide manufacturing as a part of a broader effort to make the nation vitality impartial.

The fields had been speculated to obtain extra sources in order that Pemex may start exploration and manufacturing earlier and shortly and make up for decrease manufacturing from older fields elsewhere.

However Pemex failed to finish the wells, pipelines and different infrastructure wanted to provide fuel and condensate from the fields with out excessive ranges of waste.

At Ixachi, worth destruction from condensate burning was greater than $21 million in three years; On Quesqui, it was practically $8 million in two years, paperwork present.

No condensate burning has ever been reported within the fields. Below Mexican legislation, documentation of such abuses will not be made public.

One of many paperwork stated: “The objective ought to be to maximise the utilization of all hydrocarbon merchandise on this discipline,” including that “(Pemex) doesn’t fulfill the manufacturing it has dedicated to as a result of the wells and infrastructure don’t exist.”

Within the paperwork, the regulator additionally recommends adjustments in order that Pemex avoids “burning and destroying the industrial worth of hydrocarbon merchandise.”

Traditionally, Pemex has thought of investing in fuel exploration and manufacturing infrastructure to be too costly and has as an alternative imported a lot of it from the US.

Lately, it has come beneath strain due to the environmental harm related to fuel flaring.

Late final yr, Pemex acknowledged in its up to date 2023-2027 marketing strategy that its poor environmental, social, and governance (ESG) document threatened to harm its financing as rivals had been shifting sooner to scrub energies.

(Reporting by Stephanie Eschenbacher) Modifying by Stephen Eisenhammer and Lisa Shumaker

Our requirements: Thomson Reuters Belief Ideas.

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