Mexico’s natural gas production ticked upward to 3.85 Bcf/d in May from a three-year low of 3.76 Bcf/d in April, but was down 11% year/year, government data show.
State oil company Petróleos Mexicanos (Pemex) produced 3.65 Bcf/d, or 95% of total gas output last month, with private sector operators accounting for the remainder, according to upstream regulator Comisión Nacional de Hidrocarburos (CNH).
The top five gas producing fields, all operated by Pemex, were Quesqui (570 MMcf/d), Ixachi (507 MMcf/d), Akal (355 MMcf/d), Maloob (138 MMcf/d) and Onel (133 MMcf/d).
Associated gas tied to oil production averaged 1.99 Bcf/d, versus 1.86 Bcf/d for non-associated gas. The International Energy Agency is forecasting a major decline in oil supply from Mexico between 2024 and 2030 due to underinvestment in exploration and production (E&P).
President-elect Claudia Sheinbaum has signaled her intent to continue the energy policies of her predecessor Andrés Manuel López Obrador, who has sought to solidify Pemex’s dominant role in E&P. Sheinbaum on Thursday (June 27) named economist Luz Elena González Escobar to be the country’s next energy secretary. González Escobar said she would pursue “an energy policy that will continue to guarantee national sovereignty and will at the same time advance the energy transition.”
López Obrador and Sheinbaum also both officially oppose hydraulic fracturing (fracking) in Mexico, despite the country’s substantial prospective resources of unconventional natural gas.
In a June 20 speech, CNH Chairman Agustín Díaz Lastra – a López Obrador appointee – said that exploration work should continue so that unconventional prospective resources could be reclassified as reserves. This would allow unconventional projects to be developed more quickly if fracking is authorized, Díaz indicated.
Upon taking office in 2018, López Obrador canceled bid rounds that would have made onshore unconventional gas blocks available for exploration.
Meanwhile, gas imports from the United States have accounted for 6.37 Bcf/d, or 72% of Mexico’s total gas supply this year through June 19, up 536 MMcf/d from the same period last year, Wood Mackenzie data show. The country’s overall gas demand over the same span was down 120 MMcf/d to 8.52 Bcf/d, with only the power sector showing a year/year increase in consumption.
Domestic production has accounted for 2.38 Bcf/d, or 27% of Mexican gas supply this year, according to the consultancy. Pemex has consumed 1.56 Bcf/d for its own operations, including enhanced oil recovery and refining.
Pemex, for its part, reported a third straight sequential decline in dry gas production from its processing centers to 1.8 Bcf/d in May.
Mexico natural gas prices closely track those of the United States due to Mexico’s reliance on U.S. imports. Mexico’s IPGN monthly natural gas price index averaged $1.922/MMBtu in May 2024, down from $3.159 in May 2023.
After slumping below $2.00for much of 2024 so far, Lower 48 natural gas prices have strengthened some with summer underway. NGI’s daily Henry Hub spot price averaged $2.390 on Friday.
