Pemex rules out investing in deepwater projects during AMLO's government



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Mexican oil company Pemex does not plan to invest in deepwater exploration projects during the current administration, but will be limited to shallow water and dry land projects, Alberto Velázquez, the state's chief financial officer, said on Thursday. .

At an oil congress in the central state of Guanajuato, the executive added that in the short term, Pemex expects to have the necessary metrics to improve its credit rating.

For this year the budget in exploration and production is 212 billion pesos, however, by 2020 they expect to reach between 250 thousand and 260 billion pesos, said Velázquez.

In addition, the official commented that in the next 10 years they expect to gradually return to investment levels that Pemex had four or five years ago.

Petróleos Mexicanos, he recalled, has experience in shallow water fields and land, is actually a leading company in the field; in addition it already has infrastructure.

In the previous days, Pemex reported in a statement that the installation of the offshore platforms contracted will begin, as well as the facilities for drilling new onshore projects.

At the end of August this year, the Xikin-A platform is expected to go into production; in November and December, would begin with the developments of Xikin and Esah, then the rest, to start producing with at least one well each development, he predicted.

The State's productive venture indicated that by the end of December a joint production of these new developments of approximately 70,000 barrels per day of crude oil would be expected.

However, the production of these 20 new fields plus the two developments in the existing fields will grow gradually until reaching an estimated production of 267,000 barrels per day in 2020 and 320,000 barrels per day by the end of 2021.

This Thursday morning, President Andres Manuel López Obrador said that he never committed to the Private Initiative not to cancel the oil rounds.

"I never promised that they will continue the rounds (oil), I do not know where they took off, I said very clearly in public for those who have contracts that we will not call new rounds while there are no results, because there is no investment, they are not producing, "he explained.

"As new calls, continue to deliver (concessions) without contracts to be met without this occurring? This is inadmissible," he said.

The cancellations were disapproved by some commissioners of the National Hydrocarbons Commission (CNH), who said that Petroleos Mexicanos (Pemex) should use the instruments in hand, as associations, to strengthen and fulfill the objective. government to raise its gross output.

The oil's chief financial officer said that this new government went from diagnosis to implementation of solutions focused on the gradual reduction of debt from 2022,

He noted that the administration headed by CEO, Octavio Romero Oropeza, is based on three points: financial discipline based on operational efficiency, cost efficiency and revenue maximization.

He explained that for the period 2019-2021, tax benefits for the company, through the gradual reduction of the Common Use Rights (DUC) rate, which representsmore 80 percent of Pemex's direct tax burden, and will add a total of 168 thousand 700 million pesos: 30 billion pesos in 2019, 47 thousand and 100 million pesos in 2020 and 91 thousand and 600 million pesos in 2021.

"For this year, the government also contemplated financial support of capitalization for the productive company of the state for 25 billion pesos," said Alberto Velázquez.

With information from Notimex *

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