Mexico’s state-owned Petróleos Mexicanos (Pemex) retains the title as the world’s most indebted energy company with long-term debt of $105.8 billion, but continues to boost production while making significant inroads to reduce flared volumes and greenhouse-gas (GHG) emissions.
Pemex reported average hydrocarbon production of 2.64 MMboe/d in the third quarter 2023, up 4% annually compared to 2.54 MMboe/d in second-quarter 2022, the company announced Oct. 27 in its quarterly financial and operations press release.
The company’s exploration and production strategy focuses on the “accelerated development of new fields, the reduction of times between development and start-up, the early incorporation of production from exploratory wells, as well as the mitigation of the declination of mature fields, mostly onshore and shallow waters,” Pemex said in the release.
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Pemex’s hedging strategy protects approximately 30% of its total estimated production exposure in 2023, the company said.
Financially, Pemex reported a net loss of $4.5 billion in the third quarter compared to a net loss of $2.6 billion in the same quarter last year.
“The main factors contributing to this variation were the decrease in total sales, an increase in other net income expenses and an increase in the exchange loss caused by a greater depreciation of the peso against the dollar during [the third quarter 2023],” Pemex said about its net loss. “This was partially offset by a decrease in cost of sales and in taxes and duties.”
Gas usage rising, flared volumes falling
Pemex reported an uptick in the amount of gas it used during the third quarter, which averaged 92%, up 89.6% year-over-year (yoy). However, the percentage in the most recent quarter is lower than the 94.2% reported in second-quarter 2023. Pemex continues to eye a goal of achieving 98% gas use by year-end 2024.
The Mexico City-based oil giant implemented its “Gas Use Strategy” in 2021 to boost the use of its gas, which could reduce the amount of gas released into the atmosphere by its upstream affiliate Pemex Exploration and Production (PEP).
Pemex’s strategy relies on infrastructure development and rehabilitation activities that handle, transport and condition its gas as well as maintenance of its compression and booster equipment and the closure of producing wells that exhibit high gas-oil ratios, among other actions, the company said in the release.
Flared gas volumes averaged 393 MMcf/d in third-quarter 2023 compared to 491 MMcf/d yoy. The flared volumes related mainly to gas production “highly contaminated with nitrogen in the Northeast Marine Region, maintenance, and failures of compression equipment in the South Region, as well as rejections and releases from PTRI's Gas Processing Centers,” Pemex said.
Reducing GHGs
Pemex’s gas strategy allowed the company to reduce its production of CO2 equivalent (CO2e) emissions as well as its emissions of sulfur oxides (SO).
The company’s CO2e emissions were 15.2 million tons (MMton) in third-quarter 2023, down 17.8% from 18.5 MMton yoy due to the implementation of infrastructure projects that manage and use associated gas in upstream processes as well as the continued operation of compressors in gas processing complexes.
The company’s SO emissions were 280,700 tons in third-quarter 2023, down 17.1% yoy, due to lower fuel oil consumption in refining processes and a decline in sour gas flaring in the upstream processes.