A stable production, but that does not pick up
The main argument in the presidential speech about the oil company is based on the fact that his government has managed, after a long time, to stabilize crude production. The official data reflects a slowdown in the fall that had occurred continuously since 2004.
But an increase in production is still far away and the goal of 2 million barrels by the end of the six-year term – the last that has been given for the oil company – is still far away.
The fall of the great fields
Analysts base the explanation for the drop in the company’s production on two major factors: a drop in investment in exploration, to find new and large oil-producing fields, and a decline in the state’s large assets.
The most emblematic example is Ku-Maloob-Zaap, a heavy oil producing asset in the Gulf of Mexico. The set of fields is already going through a stage of natural decline and the state company still does not have new assets to offset its production. In 2013, the asset contributed 70% of national production, a decade later it only encompasses 30%.
Condensed to increase production
The company has found in the condensates, very light hydrocarbons, the key to not lower its production any further.
Pemex obtains the condensates from two key assets, Quesqui and Ixachi. The fields make up for the drop in other locations. The state-owned company has grown its condensate production by more than 10 times during the six-year term: at the beginning of 2019 it produced just over 20,000 barrels per day of this hydrocarbon, last January – the latest data available – the figure was already 285,000 barrels per day.
But while this is happening, the production of other hydrocarbons, such as heavy oil, is going down. Condensates are already around 20% of Pemex’s total production.