Monday, July 27, 2015

After deadly blast, 2.7 MMbbl of Pemex oil go missing

After deadly blast, 2.7 MMbbl of Pemex oil go missing: "Petroleos Mexicanos seems to have misplaced 2.7 MMbbl of oil. Since a deadly blast on April 1 tore through one of its offshore platforms, the state oil giant has baffled industry analysts with its assessment of the damage. Pemex has said the disaster, its deadliest this year, affected about 1.5 MMbbl of production. But Energy Ministry reports show the actual figure is nearly three times higher: 4.2 MMbbl in lost output since April 1. The disparity raises questions about how Mexico’s lone oil operator does -- or doesn’t -- keep investors in the loop about its sprawling business. It comes as Pemex tries to lure $33 billion in joint-venture investments to bolster sagging output -- all the more important after Mexico recently failed to attract enough buyers for offshore fields it wants to develop. Pemex is “failing to understand that in this world of transparency, you have to be careful what you say,” said Luis Maizel at LM Capital Group, who manages $5.5 billion of fixed- income assets, including Pemex bonds. “People don’t forget.” Conflicting Statements Pemex has given conflicting statements about how much output was cut. In an emailed response to questions on July 8, Pemex reiterated its 1.5 MMbbl estimate. In a follow-up email on July 10, the company said Bloomberg’s 4.2 MMbbl calculation was also “in the order of Pemex’s estimates” and didn’t provide details to explain the difference when asked in additional messages. At the heart of the confusion appears to be what, exactly, Pemex means by lost output. The production isn’t “lost,” Pemex says, just “deferred.” “It seems like Pemex is using a word game to avoid calling production lost,” said George Baker, an oil analyst and publisher of Mexico Energy Intelligence. “If production is being deferred after an accident, then that means the infrastructure isn’t in place or in good enough condition to pump the oil, so wouldn’t that be the same thing as lost production?” It’s not the first time Pemex’s output figures raise such questions. In addition to missing its own annual targets in each of the past seven years, Bloomberg News in August reported Pemex was including water in its barrel count. A week later, the company acknowledged the mistake and cut production estimates for 2014’s first half by a total of 23.5 MMbbl."

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