This article was published by the US Energy Information Administration on April 20, 2023.
By Kamron Daugherty
After nearly two decades of steady declines, Mexico’s petroleum and liquid fuels production has remained stable since 2019, and we forecast production in Mexico will remain relatively flat through 2024. Private companies have increased petroleum production in Mexico over the past five years.
In 2022, Mexican government data show that private production contributed more than 5 per cent of Mexico’s total, a large increase from the 0.5 per cent oil contribution that private companies produced in 2016. In December 2013, Mexico changed its constitution to allow for private petroleum production for the first time since 1938, according to information from the U.S. International Trade Administration. Previously, Pemex, Mexico’s national oil company, was the sole petroleum producer in the country.
Mexico’s petroleum and liquid fuels production peaked at 3.9 million barrels per day (b/d) in 2004 and decreased each year until 2019, when production stabilized around 1.9 million b/d. According to our Short-Term Energy Outlook (STEO), we expect petroleum and liquid fuels production in Mexico to remain around 1.9 million b/d through the end of 2024. Several dynamics have led to production stability. For example, decreasing production of the historically top-producing shallow-water fields of the Sureste Basin (formerly known as the Campeche Basin) on the southeastern coast of Mexico has been replaced by recent field developments in other sections of the Sureste Basin, such as the 133,000 b/d from the Quesqui field in 2022, according to our updated Country Analysis Brief: Mexico.
Historically, Mexico’s petroleum and liquid fuels production outpaced its domestic use, making Mexico a net exporter of petroleum and liquid fuels. However, when Mexico’s production declined to 1.9 million b/d in 2019, consumption exceeded production for the first time. Mexico was a net importer for only one year because of a sharp decrease in petroleum consumption in 2020. In 2022, the post-pandemic economic recovery led consumption and production to each end the year at about 1.9 million b/d, according to our STEO.
Mexico’s proven oil reserves have fallen from above 10 billion barrels in 2014, International Energy Statistics show, to slightly below 6.0 billion barrels in 2023, according to the Oil and Gas Journal. More than 80 per cent of the reserves are in the Sureste Basin, and none of the proven reserves are in deepwater, water depths of between 1,000 feet and 5,000 feet. Although significant discoveries have been made of deep-sea natural gas reserves in Mexico, proven oil reserves have not yet materialized despite significant exploration efforts.
Woodside Energy, an Australian firm, has committed to producing Mexico’s first deepwater oil field in the Trion field. The Gulf of Mexico could provide significant potential for deepwater production if Mexico’s large offshore shallow-water production in the Gulf of Mexico is any indication of Mexico’s deep-sea reserves. The Mexican government has plans to capitalize on deep-sea reserves, and future development plans make additional growth in private investment likely.
Be the first to comment