Pemex says KMZ complex production fully restored since fire

Production was has been completely resumed at Pemex's 125 wells in its shallow-water Gulf of Mexico Ku-Maloob-Zaap complex shut after an Aug. 22 fire on a platform there, the Mexican state oil company said Aug. 30.

The shutdown at KMZ had a total impact on production of 1.6 million barrels, Pemex said in a statement. The company had anticipated the shutdown would reduce output at the complex by 421,000 b/d during the first days, but that it would gradually restore it.

Pemex has 207 producing wells at KMZ, averaging a total 784,300 b/d, or 46.5% of the company's overall output, in 2020, it told the US Securities and Exchange Commission in a filing.

Despite the fire, Mexico will reach its crude production goal of 1.8 million b/d by the end of the year, President Andres Manuel Lopez Obrador said Aug. 27. Total crude output in July was 1.669 million b/d, according to data from the National Hydrocarbons Commission.

The production halt did not have any impact on exports: deliveries of early September shipments of the heavy sour Maya crude produced in KMZ were unaffected, market sources told S&P Global Platts. Maya competes with with similar grades Colombia's Castilla Blend and Ecuador's Napo and Oriente. Castilla, Napo and Oriente have seen zero demand from China, one of their main destinations, in recent weeks.

However, there was great interest in the restart of operations of KMZ as a prolonged recovery of the complex would translate in higher crude prices of Castilla Blend and Ecuador's Oriente and Napo, the sources said.

The platform were the fire broke generates power which pumps natural gas into the wells for crude production, according to the company.