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 assets 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 necessary fields. new.

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

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

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

Late final yr, Pemex mentioned it could halt the follow of flaring fuel at Ixachi after Reuters stories of improvement plan violations on the two fields and associated fines.

Below strain to satisfy 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 guaranteeing compliance.

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

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

Mexico – the world’s eighth largest fuel operator – is below rising strain, together with from america, to cut back the follow and its methane emissions.

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

In Ixachi, the devastation was significantly 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. But it surely nonetheless falls in need of attaining its targets.

The paperwork additionally present that 77.6% of the funding within the subject Pemex pledged in its improvement 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 enhance nationwide manufacturing as a part of a broader effort to make the nation vitality unbiased.

The fields had been imagined to obtain extra assets in order that Pemex might 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 supply 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 just isn’t made public.

One of many paperwork mentioned: “The aim needs to be to maximise the utilization of all hydrocarbon merchandise on this subject,” 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 modifications 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 america.

In recent times, it has come below 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) file threatened to harm its financing as opponents had been transferring quicker to scrub energies.

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

Our requirements: Thomson Reuters Belief Ideas.

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