Pemex Slashes Oil and Gas Reserves Estimates as Part of New Accounting Methodology

Strategic Insights -

Mexican national oil monopoly Petroleos Mexicanos (Pemex) announced a significant reduction in the country's crude oil and natural gas reserves, citing a new accounting methodology aimed at aligning the company with international standards. According to Pemex Director-General Adrian Lajous, total hydrocarbons reserves estimates for the end of 1998 have been more than halved to 28 billion bbl of oil equivalent (boe), down from 60 billion boe a year earlier. Reserves of dry natural gas were cut to 30 Tcf from 64.5 Tcf. The revisions were made as part of Pemex's effort to adopt a more transparent and internationally aligned reporting system.

Key Takeaways:

  • Pemex's total hydrocarbons reserves estimates for the end of 1998 have been reduced to 28 billion bbl of oil equivalent (boe), a decline of 53% from the previous year's estimate of 60 billion boe.
  • Dry natural gas reserves were cut to 30 Tcf from 64.5 Tcf, representing a decrease of 53.5%.
  • The new accounting methodology is aligned with international standards, aimed at increasing transparency and comparability with global oil majors.
  • Pemex has announced four new discoveries in the Cantarell oil fields complex, Mexico's largest, but declined to provide estimates of their size.
  • The company plans to spend nearly $5 billion between 1997 and 2011 to boost production from the Cantarell fields, including $1 billion on the world's largest nitrogen production and injection scheme.
  • Pemex has struggled with low oil prices in the past year, but the company's recent optimism is fueled by the price increase following the agreement reached at The Hague, where the average price of Mexico's crude exports has risen to $11.12/bbl.

Statistics:

  • 28 billion bbl of oil equivalent (boe) - Pemex's revised total hydrocarbons reserves estimate for the end of 1998.
  • 60 billion boe - Pemex's previous year's total hydrocarbons reserves estimate.
  • 30 Tcf - Pemex's revised dry natural gas reserves estimate.
  • 64.5 Tcf - Pemex's previous year's dry natural gas reserves estimate.
  • 28,000,000,000 bbl of oil equivalent (boe) = 28 billion boe.
  • 4 - Number of new discoveries in the Cantarell oil fields complex announced by Pemex.
  • $5,000,000,000 - Pemex's planned investment in boosting production from the Cantarell fields between 1997 and 2011.
  • $1,000,000,000 - Pemex's planned investment in the world's largest nitrogen production and injection scheme.

Sources:

  • Pemex Director-General Adrian Lajous
  • Mexican President Ernesto Zedillo
  • Sen. Carlos Romero Deschamps, secretary-general of the Mexican oil workers union
  • "Pemex Slashes Reserves, Cites New Accounting Methodology" - Unnamed news source.