Pemex Alters Reporting to Mask Declining Crude Oil Production
State oil company merges crude and condensate figures, obscuring actual production levels.
1Shift in Reporting Methodology
Pemex has altered its reporting structure for liquid hydrocarbon production, merging crude oil and condensate figures into a single metric. Previously, the state-owned company provided a clear breakdown of these components. This change makes it difficult for analysts to determine the exact volume of crude oil being extracted for refining purposes.
2Declining Crude Oil Output
In August, the last month with transparent data, crude oil production fell to 1.33 million barrels per day. This represents one of the lowest levels recorded since 1990. By including approximately 300,838 barrels of condensates daily, the company artificially inflates its total output figure to reach the 1.62 million barrel threshold.
3Government Production Targets
The current federal administration set a goal of producing 1.8 million barrels of liquid hydrocarbons daily during this term. With current output hovering around 1.62 million barrels, the target remains elusive. Critics argue that the reporting change is a tactical move to mask the failure to meet these ambitious production benchmarks.
4Official Defense of Strategy
During a legislative appearance, Pemex Director Juan Carlos Carpio defended the inclusion of condensates in production reports. He argued that condensates hold significant market value and are essential components in refinery diets and export mixtures. However, he provided no explanation for why the company stopped presenting these figures as separate data points.
5Legal and Transparency Concerns
Industry experts highlight that the Law on Hydrocarbon Revenue mandates the separate reporting of crude, condensates, and natural gas. Gonzalo Monroy of GMEC stated that aggregating these figures contradicts legal accounting requirements. This lack of transparency hinders the ability to track the specific performance of different hydrocarbon assets within the state portfolio.
6Impact on Fiscal Obligations
The requirement to report components separately is not merely for transparency but for calculating royalties and contractual payments. Different tax regimes, such as the 'Derecho Petrolero para el Bienestar,' apply distinct rates to crude oil versus natural gas. Merging these figures complicates the accurate assessment of fiscal obligations owed to the state.
7Refining and Export Implications
Crude oil is the primary input for refineries to produce fuel and is the main component of the Mexican Export Mix. By obscuring the volume of crude versus condensates, Pemex makes it harder to evaluate the efficiency of domestic refining operations. This ambiguity affects the market's understanding of Mexico's actual energy export capacity.
8Future Oversight Challenges
The move to consolidate data points signals a retreat from transparency standards established in previous years. Lawmakers and industry analysts are now calling for a return to disaggregated reporting to ensure accountability. Without clear data, stakeholders remain unable to verify the true health of Mexico's oil sector or its long-term production trajectory.
Original article: Expansión — Pemex Alters Reporting to Mask Declining Crude Oil Production