Mexico targets 50 percent jump in oil output under ‘Pemex rescue’

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By Dave Graham

MEXICO CITY (Reuters) – Mexico aims to lift oil and gas production by almost 50 percent in the next six years and in January will award infrastructure and drilling contracts to develop 20 fields, state oil firm Petroleos Mexicanos said on Saturday.

Octavio Romero, chief executive officer of the company generally known as Pemex, said the new government would increase exploration investment by around 10 percent annually to reverse dwindling output as he presented a new plan for the industry.

President Andres Manuel Lopez Obrador, who took office on Dec. 1, wants to revive Pemex, which has become heavily indebted as crude output fell from a peak of nearly 3.4 million barrels per day (bpd) in 2004 to less than 1.8 million in October.

“It’s a new Pemex rescue,” Lopez Obrador said alongside Romero in the port of Ciudad del Carmen in the southern Gulf of Mexico shortly before his government was due to present its first budget with Pemex’s finances under close scrutiny.

Under the plan, Mexican crude output is due to climb to some 2.624 million barrels bpd by the end of 2024, while gas production will also rise by about 50 percent.

Output will stabilize in the coming months and start to pick up toward the end of next year, the Pemex CEO said. However, projections presented in the government’s first budget later on Saturday suggested output would continue falling until 2020.

Mexico’s previous government sought to increase production by opening up production and exploration to private capital. But the decline has yet to bottom out.

Read more at : https://www.investing.com/news/stock-market-news/mexico-targets-50-percent-jump-in-oil-output-pemex-revival-1722754

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