Pemex, Mexico’s state oil company, is laying the groundwork for a new round of deepwater exploration in the Gulf of Mexico in hopes to land a new elephant or two that could play a meaningful role in reversing the country’s downward production trajectory in the coming years.
The company has seen its crude oil production cut in half since 2004 when production peaked at around 3.8 million B/D. By 2019, that number had fallen to nearly 1.8 million B/D. Levels have stabilized in recent years with the current estimate being just over 1.9 million B/D.
Since taking office in 2018, Mexico President Andrés Manuel López Obrador has directed the operator to concentrate its drilling activity on less costly areas such as shallow water and onshore. Pemex is the world’s most indebted oil company with a debt load in excess of $100 billion.
“We haven’t heard of any really large discovery recently,” said Diego Becerril, research manager, global analyst upstream team with Wood Mackenzie. “It’s been a couple of years since they last announced a giant discovery. They used to do it every year.
“They were able to kind of control the production decline for a few years—2022 and 2023—I think by continuing to explore near areas that they already know, which in the end, doesn’t have that much prospectivity, but they can bring it online in a relatively short term and add volumes into the production portfolio.
