Mexico’s state oil company Petróleos Mexicanos (Pemex) has set an upstream capital expenditures (capex) budget of 240 billion pesos ($13.4 billion) for 2023, up from 162 billion pesos ($9.05 billion) in 2022.
The 100% state-owned firm outlined the investment plans in its latest 20-F annual report filed to the U.S. Securities and Exchange Commission in late April.
Pemex has allocated 44.4 billion pesos ($2.48 billion) for the offshore Ku-Maloob-Zaap complex, nearly double the amount budgeted last year.
Maloob and Zaap were Mexico’s No. 1 and 2 producing oilfields, respectively, as of March. Maloob, Ku and Zaap ranked fourth, fifth and seventh for natural gas output, according to data from upstream regulator Comisión Nacional de Hidrocarburos (CNH).
Second place in the upstream capital budget for 2023 goes to the onshore Ixachi natural gas and condensate field, which has helped keep Mexico’s gas and liquids production afloat amid declining output from the mature fields in Pemex’s portfolio.
For Ixachi, Pemex has set a capex budget of 19 billion pesos or $1.06 billion, versus 5 billion pesos ($287 million) last year. Ixachi was Pemex’s second-leading natural gas producing field in March at 352 MMcf/d. The onshore Quesqui field took the top spot at 671 MMcf/d, CNH data show.
According to its 2023-2027 business plan, Pemex is aiming to produce 4.67 Bcf/d of gas in 2023, driven largely by Ixachi and Quesqui. First-quarter output averaged 4.1 Bcf/d, more than 500 MMcf/d short of the target.
“From my point of view, the increase in costs [at Ixachi] is related to the absolute non-existence of project control,” independent energy analyst Rosanety Barrios told NGI’s Mexico GPI. “What we’re seeing is that Pemex’s costs of operation continue rising without control in the quest to increase production at any cost.”
Pemex has budgeted 11.5 billion pesos ($643 million) for development of Quesqui in 2023, versus 12.9 billion pesos ($722 million) last year.
Other leading projects in this year’s capex budget include the offshore Ek and Balam fields, referred to jointly as Ek-Balam. Pemex is planning to nearly double its investment at Ek-Balam to 14 billion pesos ($784 million) this year.
At the Lakach deepwater gas field, which Pemex is jointly developing with LNG exporter New Fortress Energy Inc., Pemex has earmarked 689 million pesos ($38.6 million) of capital spend this year.
Pemex published the 20-F report shortly before releasing its first-quarter 2023 results, which were mostly positive for the producer.
Pemex reported net profit of 56.7 billion pesos or about $3.17 billion for the first quarter, versus a profit of 122.5 billion pesos ($6.85 billion) in the same period last year.
The 4.1 Bcf/d wellhead gas production figure was up 7.4% year/year. Dry gas output from Pemex processing centers averaged 2.76 Bcf/d, versus 2.79 Bcf/d a year earlier.
Associated gas tied to oil production accounted for 54% of output, with nonassociated gas supplying the remaining 46%. Onshore and offshore fields supplied 56% and 44%, respectively.
The natural gas capture rate was 92.4%, with flared volumes totaling 373 MMcf/d, versus 390 MMcf/d in 1Q2022.
Oil production, meanwhile, averaged 1.85 million b/d for the quarter, up 5.9% year/year.
