Pemex slashes audited oil reserves
OREANDA-NEWS. May 19, 2016. Mexico's state-run Pemex slashed its proved oil reserves for end-2015 by 22pc to 7.977bn bl in a regulatory filing to the US Securities and Exchange Commission (SEC).
The downturn in liquids reserves, which includes developed and undeveloped crude, condensates and NGLs, reflects deep financial strain after the 2014 tumble in oil prices, and natural upstream decline.
At the end of 2014, Pemex reported proved reserves of 10.292bn bl.
The reserves reduction stemmed from an audit by DeGolyer and MacNaughton; Netherland, Sewell International; and Ryder Scott.
Pemex?s reserves consist of areas awarded to the company by the Mexican government in a 2014 Round Zero tender that set aside acreage for unprecedented upstream tenders under a major energy reform.
Pemex registered another 120mn bl of oil equivalent (boe) of proved hydrocarbon reserves in 2015 from new discoveries, but this volume fell far short of reductions stemming from revisions, delimitations and lower production in the same period.
This meant Pemex's reserve-replacement ratio for 2015 was null, down from 18pc in 2014.
The ratio is calculated by dividing the sum of proved reserves additions by total production.
In February, the finance ministry unveiled a 132bn peso (\\$7.1bn) spending cut to the 2016 federal budget, of which 100bn were allocated to Pemex. This is the second year in a row that weak oil prices have forced Mexico to revise its budget.
In 2015, upstream capital expenditures decreased by 31.1pc but exploration drilling activity increased by 8.3pc, from 24 exploration wells completed in 2014 to 26 last year, according to the SEC filing.
Mexico's oil production has been declining since hitting a peak of 3.4mn b/d in 2004, reflecting sliding production from the once-giant Cantarell complex and other fields.
In March, the latest available data, Pemex produced 2.217mn b/d of crude, down 4.4pc from a year ago.
According to the report, Pemex's proved dry gas reserves as of 31 December 2015 reached 8.610 trillion ft3, down 20.7pc from end-2014.