BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to: Latest news headlines Analytical topics and features Commodities videos, podcast & blogs Sample market prices & data Special reports Subscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber (https://pmc.platts.com), Please navigate to Platts Market Center to reset your password.

In this list
Oil

Mexico needs 15 successful upstream auctions to reach output forecast: AMEXHI

Crude Oil

Oil sector feels pinch of Colorado drilling setbacks, Trump trade policies

Crude Oil

Platts Wellscape GIS

Oil | Crude Oil

Platts Workshop at the S&P Global Platts Energy

Oil

US Gulf of Mexico lease sale suggests oil companies are thinking more long term

Mexico needs 15 successful upstream auctions to reach output forecast: AMEXHI

Highlights

News and market commentary

Price reports

Access to the Platts Mexico Facilities Databank

Supply and demand analysis

Short- and mid-term natural gas and LNG imports forecasts

Mexico would require at least 15 upstream oil and gas auction rounds as successful as Round 1 to fulfill the International Energy Agency's production forecast, a Mexican Association of Hydrocarbon Companies, or AMEXHI, study showed Tuesday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The IEA Mexican Energy Outlook forecast Mexico could produce 2.8 million b/d in 2040, adding the country requires investments of $640 billion to achieve this production level. From that 2.8 million b/d, 2.5 million b/d would come from new projects in 2040.

"This is a titanic effort," said Pablo Zarate, information director of AMEXHI's research center, said at an AMEXHI event Tuesday.

Related story: Mexico's CFE chief eyes 'strategic alliance' private sector

Only 2% of Mexico's total oil production comes from reservoirs that started producing in the last 25 years, Monica Boe, leader of AMEXHI's resource access committee, said at the event.

This is a small amount compared with US' 7%, Venezuela's 8%, and the UK's 35%.

"The amount of new discoveries in Mexico are very low. To reverse this, we need to explore intensively," said Boe.



To achieve the 2.8 million b/d production level, Mexico would require drilling between 20 and 30 exploratory wells and 40 and 50 evaluation wells every year until 2040, said Boe.

Under an investment analysis, Mexico would require investments of $26.6 billion per year.

Zarate said that close to half of the required investment could come from Pemex, which would have to invest $14.3 billion per year, or $300 billion until 2040.

These numbers were calculated under Pemex's investment levels in recent years, said Zarate.

Pemex invested a historical record of $16.6 billion in 2014 with oil prices at $98/b, then invested $9.6 billion in 2015 with prices at $52/b, and $6.5 billion in 2016 with prices at $43/b.

The private sector would have to invest $12.3 billion per year, or $340 billion under this period.

According to Zarate, Mexico would require investments from 15 bid rounds as successful as round 1 to raise the remaining $340 billion.

Mexico Energy Secretariat, or aSENER, predicted Round 1 would bring $41 billion. However, Zarate said after applying an exploratory risk factor, AMEXHI expects a minimum investment level of $20 billion will materialize from the round.

--Daniel Rodriguez, newsdesk@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com