Mexico's oil and natural gas giant Petróleos Mexicanos (Pemex) has named academic Victor Rodríguez Padilla as its new CEO.
Rodríguez currently teaches post-graduate classes at Mexico’s Universidad Nacional Autónoma de México (UNAM). He will replace outgoing head Octavio Romero, who oversaw a heavily-indebted company that, over the past six years, struggled to hit oil and natural gas production goals.
Rodríguez “is a longtime academic, critical of any efforts to liberalize Mexico's oil and gas industry,” Mexico City-based energy consultant Gonzalo Monroy told NGI’s Mexico GPI. “He has an extensive record working as a legislative aide to several leftist politicians, which is where he crossed paths with Claudia Sheinbaum almost 30 years ago.”
Sheinbaum will be Mexico’s next leader when the handover from President Andrés Manuel López Obrador occurs on Oct. 1.
“As an ideologue, Rodríguez has a solid understanding of energy policy and contractual schemes used by Pemex,” Monroy said. “Based on his articles, collaborations and academic work, he sees Pemex as the sole oil and gas operator in Mexico.”
During his speech accepting his nomination, Rodríguez mentioned supporting renewable energy, including offshore wind. He also promised to continue López Obrador’s “energy sovereignty” platform.
Monroy and other analysts were critical of Rodríguez’s lack of operational expertise as the company tries to turn around years of poor results.
Slumping Production
The change in CEO comes as Mexico’s natural gas production continues to underperform.
Mexico’s natural gas production averaged 3.69 Bcf/d in July, down from 3.82 Bcf/d in June and 4.57 Bcf/d in July 2023.
Pemex supplied 3.50 Bcf/d of last month’s total, compared with 4.07 Bcf/d in the year-ago month, according to data from upstream regulator Comisión Nacional de Hidrocarburos (CNH). Pemex accounted for 96% of total gas production, with private sector operators supplying the remainder.
Mexico’s gas production has declined on a year/year basis each month this year, and has dropped sequentially in every month except May.
Natural gas imports into Mexico via pipeline from the United States, meanwhile, averaged 7.15 Bcf/d over the 30-day period ended Aug. 21, up 290 MMcf/d versus the same period last year, Wood Mackenzie data show.
Since Pemex itself consumes about 1.5 Bcf/d of natural gas, pipeline imports account for about 72% of Mexico’s total gas supply, according to the firm.
Mexico’s dependence on U.S. natural gas means prices in Mexico closely track those north of the border, which have remained in a prolonged slump. Mexico’s IPGN monthly natural gas price index averaged $2.313/MMBtu in July 2024, versus $3.914 in July 2023.
Mexico’s top five natural gas producing fields in July, all operated by Pemex, were Ixachi (557 MMcf/d), Quesqui (526 MMcf/d), Akal (224 MMcf/d), Maloob (138 MMcf/d) and Onel (109 MMcf/d).
Associated gas extracted as a byproduct of oil production accounted for 49% of total natural gas output in July, with non-associated gas supplying the remaining 51%. Crude oil production, for its part, averaged 1.57 million b/d in July, versus 1.64 million b/d in the year-ago month.
CNH last week approved modified development plans for Maloob and the Lakach deepwater project, which also is operated by Pemex. Billionaire Carlos Slim’s conglomerate Grupo Carso SAB de CV in July signed a services contract with Pemex to help develop Lakach.
At Maloob, part of the shallow water Ku-Maloob-Zaap complex, Pemex plans for capital expenditures (capex) to total $13.79 billion from 2024 to 2039. The company expects to recover 251.5 Bcf of natural gas from the field over that period, up 45.2 Bcf from the previous development plan. Oil production is expected to total 479.4 million bbl.
As for Lakach, Pemex expects to produce 847.9 Bcf of natural gas and 3.1 million bbl of condensate from 2024 to 2041, maintaining gas output of 200 MMcf/d for eight years “with a final recovery factor of 77%,” according to the plan. Capex is projected to total $1.67 billion.
Meanwhile, outgoing President López Obrador has cast doubt over the future of CNH and the Comisión Reguladora de Energía with a proposed constitutional amendment that would eliminate the independent agencies entirely.
The Constitutional Law Committee of Mexico’s Chamber of Deputies approved the measure this week, meaning it could go before the lower house at large and then, if approved, to the Senate.
