COMPETITIVE INTELLIGENCE SERVICE

The state-led Mexican company is pushing production before the end of the President Andres Manuel Lopez Obrador's term.

After a tumultuous 2022, here is what we will be watching over the coming 12 months for each of our core covered peer groups.

Mexico’s oil opening was widely hailed as a success in attracting diverse foreign investment, highlighting the range of the country’s offerings. Yet, new President Andres Manuel Lopez Obrador has rolled back elements of the energy reform, notably canceling bid rounds and Pemex farm-outs. This has left M&A activity as the only avenue to enter Mexico or expand holdings in the near term. Despite the political risks, private companies are advancing exploration and development plans, with Eni for example achieving first oil at Amoca-Mizton-Tecoalli earlier this month. Nonetheless, offshore Mexico’s strategic fit in company portfolios varies widely, as benchmarked in this BCI quarterly report. A handful of companies such as Eni, Shell, Petronas and Wintershall Dea have made Mexico a key strategic priority, with several other firms on the cusp of exploration campaigns that if successful could boost Mexico’s relative importance. Others are re-evaluating their Mexican portfolios, opening the door to asset divestitures.

The Japanese upstream firm expands its array of investments in the South Pacific.

Issues of inventory degradation are dogging US operators, who are countering the problem through a mix of deals, refracks and exploration. All are taking on a different flavor than they did in the past.

Exploration activity in 2023 is continuing on pace, with traditional regions experiencing an uptick in activity as well as frontier plays, as companies seek organic growth options. Mexico is experiencing a green patch with exploration successes by Eni and Wintershall Dea, and as operators aim to complete exploration license commitments that expire this year. The resumption of USGOM lease sales, despite earlier policy uncertainty, is providing confidence to regional operators and reigniting limited exploration activity. Several high-impact wells by TotalEnergies, Chevron, Eni, Shell and BP are anticipated in the Eastern Mediterranean through the second and third quarter of 2023.