It was not immediately clear how much production would be removed by the closure of new fields and whether it would exceed a 100 000 bpd quota already agreed with the OPEC+ group of producing countries.
Pemex last year announced a plan to reopen and develop about 20 oilfields that could produce around 50 000 bpd of crude. Production so far achieved in those areas is only about 5000 bpd, according to market sources.
“Why does the fall in prices not affect us so much? Because we invested last year in well drilling in new oilfields,” President Andres Manuel Lopez Obrador said during his regular morning news conference.
“Those new wells, now that oil is worthless, we can shut their valves and they don’t lose pressure.”
Mature fields would be harder to close down because Pemex artificially creates pressure below ground to extract crude from many of them, while oil flows naturally from the newer fields.
The price of US West Texas Intermediate and Mexico’s flagship Maya crude closed on Monday in negative figures for the first time ever, reflecting lack of space for storing oil around the world as demand keeps falling.
The US benchmark bounced on Tuesday with the June contract settling at US$11.57/bbl while Brent futures fell 24% to US$19.33/bbl.
Mexico’s Energy Secretary Rocio Nahle earlier this month said the nation would not cut output, but weeks later Mexico joined the OPEC+ pact by agreeing to a 6% production cut.
Lopez Obrador said his strategy of boosting national refining was already paying dividends and that almost half of the country’s crude output was now being processed domestically.
He said Pemex is sending about 800 000 bpd of a 1.7 million bpd production to domestic refineries, which would be able to process 1 million bpd next month.
“In May, we will be processing 1 million barrels per day,” Lopez Obrador said. “We will be able to produce more gasoline in Mexico and stop purchases of foreign gasoline. That will help us overcome the crisis produced by the price fall.”
Pemex data for February, the most recent month available, showed Mexico’s refineries were processing 580 400 bpd.
Experts have said that refining more of Mexico’s mostly heavy crude production would increase output of residual fuel so Pemex would end up with more fuel available for power generation, but not with more gasoline.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/22042020/pemex-halting-production-at-newly-drilled-wells/
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