Exclusive: Mexico's Pemex destroyed resources worth $342 million from two top fields

Exclusive: Mexico’s Pemex destroyed resources worth $342 million from two top fields

MEXICO CITY, Jan 18 (Reuters) – Mexican state oil firm Pemex illegally burnt off hydrocarbon resources worth greater than $342 million within the three years as much as August 2022 at two of its most necessary new fields, inner paperwork from the nation’s oil regulator confirmed.

The three paperwork, produced by the regulator and dated August 2022, element how Pemex (PEMX.UL) destroyed resources worth $275 million from the Ixachi subject in three years and $67 million from the Quesqui subject in two years.

To calculate the worth, the regulator used costs from private contracts to commercialize such hydrocarbons.

Neither Pemex nor the vitality ministry responded to requests for remark.

Late final yr, Pemex stated it will cease the flaring follow at Ixachi following Reuters reviews on growth plan violations on the two fields and associated fines.

Under stress to fulfill bold manufacturing objectives by Mexican President Andres Manuel Lopez Obrador, has repeatedly been fined by the oil regulator for violating its personal pledges for the event of the Ixachi and Quesqui fields.

The plans, for the exploration and manufacturing of pure gasoline and different hydrocarbons within the southeastern states of Veracruz and Tabasco, have been accredited by the regulator – which is accountable for guaranteeing compliance.

Burning off gasoline and condensate – a combination of liquid hydrocarbons just like a really mild crude oil – has additionally resulted in in depth environmental harm.

Reuters reported final yr that Pemex had been excessively flaring gas across the region, however the worth of the destruction has not beforehand been reported.

Mexico – the world’s eighth-biggest gasoline flarer – is underneath growing stress, together with from the United States, to chop the follow and methane emissions.

Managing emissions is ready to change into more difficult as fields age and the world’s most indebted oil firm lacks enough funds to improve ailing infrastructure.

In Ixachi, the destruction was significantly dramatic as a result of manufacturing began a yr earlier. There, the paperwork present Pemex burnt off some 62.9 billion cubic toes of gasoline and 310,000 barrels of condensate.

That is the equal of 31% of the entire quantity of gasoline produced from the sphere, and 1.3% of whole condensate, in keeping with Reuters calculations.

The paperwork have been despatched to the nation’s vitality minister, Rocio Nahle, the pinnacle of regulatory compliance at Pemex’s exploration and manufacturing arm, and senior officers on the regulator and the inside ministry.


Pemex produced 201.2 billion cubic toes of gasoline and 24.3 million barrels of condensate from Ixachi. But it nonetheless fell wanting its targets.

The paperwork additionally present that 77.6% of the funding into the sphere Pemex had pledged in its growth plan – totaling $2.9 billion – weren’t made.

Lopez Obrador declared early on in his presidency that Ixachi and Quesqui fashioned a part of 17 new precedence fields anticipated to dramatically enhance nationwide manufacturing as a part of a wider effort to make the nation vitality impartial.

The fields have been meant to obtain extra resources so Pemex can begin exploration and manufacturing earlier and sooner and make up for declining manufacturing from ageing fields elsewhere.

But Pemex failed to finish the wells, pipelines and different infrastructure wanted to provide gasoline and condensate from the fields with out excessive ranges of waste.

In Ixachi, the destruction of worth from burning off condensate was greater than $21 million in three years; in Quesqui, it was nearly $8 million in two years, the paperwork present.

It has not beforehand been reported that condensate was additionally burnt off on the fields. Under Mexican regulation, documentation round such violations just isn’t made public.

“The goal needs to be to maximise making use of all hydrocarbon merchandise within the subject,” one of many paperwork stated, including that “(Pemex) doesn’t meet manufacturing it dedicated to as a result of wells and infrastructure aren’t in place”.

In the paperwork, the regulator additionally recommends modifications in order that Pemex “avoids the burning off and the destruction of economic worth of the hydrocarbon merchandise.”

Pemex has traditionally deemed investing in infrastructure to discover and produce gasoline too costly and as an alternative imported a lot of it from the United States.

In current years, it has come underneath stress due to the environmental harm related to burning off gasoline.

Late final yr, Pemex acknowledged in its up to date marketing strategy for 2023 to 2027 that its poor environmental, social and governance (ESG) report risked hurting its financing as rivals have been transitioning sooner to scrub energies.

Reporting by Stefanie Eschenbacher
Editing by Stephen Eisenhammer and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.