Mexico says oil for home use, claims find

Associated Press

Mexican officials said March 18 they have found an oil field with possible reserves of 500 million to 600 million barrels, but President Andres Manuel Lopez Obrador vowed not to pump more than 2 million barrels per day nationwide, the amount he says is needed to supply domestic demand.

“This new policy means not pumping more oil than is needed to cover domestic demand for fuels,” Lopez Obrador said. “In quantitative terms, this means that during our administration we will not pump out of the ground more than 2 million barrels per day.”

In part, that is wishful thinking. The state-owned oil company Petroleos Mexicanos, or Pemex, currently produces only about 1.75 million barrels per day.

But Pemex Director Octavio Romero said the newly identified onshore Dzimpona 1 deposit, located in the Gulf coast state of Tabasco, should help the company boost daily production to 2 million barrels by the end of this year.

He said Mexico’s proven total reserves, which had fallen from 16 billion barrels in 2006 to 7 billion when Lopez Obrador took office Dec. 1, 2018, have slowly recovered to about 7.4 billion barrels and should reach 7.8 billion by the end of 2021.

Romero also revealed Pemex has been widely delaying payments to its suppliers and contractors. He acknowledged the problem has become so bad that some suppliers have turned to bribing officials or turning to hiring middlemen to try to get paid for work they have done.

He said that with the coronavirus pandemic and drop in demand, “Pemex’s finances were highly affected.”

Romero urged business owners to have confidence that Pemex will eventually pay its debts, and announced a public website of payments, to stem a flood of public information requests from people waiting to get paid.

“Businessmen, have absolute confidence that Pemex will fully honor its commitment and pay all its debts,” Romero said.

- Associated Press