The income that Mexico obtains from oil and gas extraction is an alternative to finance the migration to the use of clean and renewable energy, said Agustín Díaz Lastra, president of the National Hydrocarbons Commission (CNH).
Participating in the “2024 National Petroleum Convention: For a growing Mexico,” the official acknowledged that the country is experiencing a decline in crude oil production, but stressed that the income generated by this sector will still be a source for public finances, as has been the case for decades.
He explained that, given the depletion of fossil fuels, the migration to renewable sources requires significant funds, so the surpluses left by hydrocarbons can be used today “so as not to have to resort to excessive loans, as long as we implement proper planning.”
He commented that in addition to the low annual investments allocated to the exploration of productive resources, it must be considered that Mexico is no longer in an initial stage of large hydrocarbon discoveries, but also that the exploration strategy is only short-term.
“From the perspective of the hydrocarbon industry, investments in extraction undoubtedly provide, in the short term, greater income than investments,” he said.
He considered that the lack of planning in a portfolio of projects for exploratory activities causes the additional volumes that are discovered to tend to be inconsistent and also insufficient for a correct and safe development of the hydrocarbon industry in the medium and long term.
He explained that exploration activities have been geared towards the so-called garden model, that is, the location of prospects for drilling exploratory wells in very close areas, where there are already established deposits and therefore have infrastructure available or nearby.
“This garden strategy is opportune for the short term, but insufficient and risky for a horizon longer than a couple of years due to the constant decline of our mature fields. So far it has yielded fair results, but it cannot be repeated too often as the only exploration strategy,” he said.
He stressed that ensuring fuel sufficiency in Mexico requires planning among Mexican government institutions, together with all participants in the hydrocarbon industry, so that the country’s highest authorities can make the best possible decisions for the year 2030 and beyond.
Díaz Lastra pointed out that good results in exploration constitute one of the pillars for improving the debt profile of oil companies, in particular, Petróleos Mexicanos (Pemex).
At the same forum, Alberto de la Fuente, president of the Mexican Association of Hydrocarbon Companies (Amexhi), highlighted that this sector is ready to continue collaborating with the administration of President Claudia Sheinbaum Pardo and continue generating benefits for the State.
“The arrival of the new government opens an important opportunity to build new cooperation schemes that allow us to take advantage of the opportunities that lie ahead. The Mexican State already receives the benefits of public-private partnerships today, and we are convinced that continuing these efforts in the next administration will result in very important benefits for the country,” he said.
To date, the industry has made transfers and investments that have generated a benefit to the State of around 700 billion pesos. In addition, companies pay, on average, 74 percent of royalties and compensation to the State for the operation of the contracts and 21 new deposits have been discovered.
De la Fuente also highlighted the importance of having a solid, transparent and predictable legal framework to promote investment and job creation. He also noted that strengthening Pemex is key to ensuring the country’s energy growth.
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– 2024-09-21 06:40:20
