Mexico’s state oil and gas giant Petróleos Mexicanos, or Pemex, reported a 7.5% year/year drop in natural gas production in the first quarter as the country's aging offshore oil fields showed weaker output.
Natural gas production, including from partners, was 3.836 Bcf/d in the first quarter, down 312 MMcf/d compared to the comparable period in 2023, management said during the first quarter earnings call.
Associated gas production declined considerably, down by 12.5% year/year to 1.952 MMcf/d in the quarter. During the call, executives attributed the drop to declines at the offshore Akal and Ku fields.
Non-associated gas dropped by 33 MMcf/d to 1.884 Bcf/d in the quarter. The drop was primarily due to lower production at the Quesqui field, which is considered one of Pemex’s priority fields, as production there has ramped up in the last few years.
The company also said weather conditions resulted in delays in the completion of wells, which further hampered output.
In the first quarter, Pemex completed 28 development wells, down three compared to the same period in 2023. Thirteen exploratory wells were completed in the quarter, down six year/year.
In the first quarter of 2024, Pemex was able to use 93.9% of the gas it produced. The company flared 291 MMcf/d, a 20% drop year/year as the company continues to invest in improved gas capture rates.
In March, Pemex’s board of directors approved a sustainability plan to advance environmental, social and governance objectives. As part of the plan, Pemex set a goal of reducing greenhouse gas emissions by achieving 98% gas use and zero routine flaring as it aims to hit net-zero emissions by 2050.
In the first quarter of 2024, wet gas processing averaged 2.419 Bcf/d, down 12.3% compared to the same quarter of 2023.
Dry gas production was 1.924 Bcf/d, a 14.1% decrease compared to the same quarter last year. This was primarily due to lower gas production in the Nuevo Pemex and Ciudad Pemex gas processing complexes.
Liquids production with partners totaled 1.820 million b/d in 1Q2024, down 2.8% compared to the year-ago period. Declines at the Zaap, Xanab, Ayatsil, Ku and Quesqui fields were partially offset by gains in the Tupilco Profundo, Ixachi and Racemosa fields.
During the call, executives said that national refinery throughput was now around 1 million b/d as the government continues to push for refined fuels self-sufficiency. Management said production of diesel at the Dos Bocas refinery, one of the outgoing government’s flagship projects, would begin next month.
Pemex posted a profit of 4.7 billion pesos ($275 million) in 1Q2024, compared with net income of 56.7 billion pesos in the year-ago period.
The company’s debt was about $101.5 billion at the end of the quarter. Executives said the debt load was reduced by $4.5 billion during the quarter and they expected to continue to receive government support to continue to reduce the debt figure.
