Petroleos Mexicanos, the state-owned oil producer, is seeking additional funding to expand gas output and reduce Mexico’s dependence on U.S. imports.
Pemex, as the Mexico City-based company is known, wants an extra 10 billion pesos ($780 million) to increase production by 1 billion cubic feet per day by the end of next year, Carlos Morales, director for exploration and production, said today.
“We are committed to increasing gas output,” he said in an interview in Cancun. “We’re in talks with the Finance Ministry to obtain additional funds to invest solely in gas.”
Pemex is looking to boost output to meet rising demand from households to steelmakers such as Ternium SA (TX:US) and ArcelorMittal. (MT) Latin America’s second-largest economy has increased gas imports from the U.S., where the shale boom has driven down prices, as its state-owned pipelines run near capacity.
The request for more funds comes after Congress approved a budget that fell $1.1 billion short of what Pemex originally requested. This year’s 326 billion-peso plan for capital expenditures was 4 percent below the 340 billion pesos the company had requested.
“The funds would help reactivate some of the fields of our portfolio such as the gas area of Veracruz, Burgos, Cinco Presidentes, Delta del Grijalva and Lankahuasa,” Morales said. Pemex expects “those funds as soon as this year,” he said.
The Finance Ministry probably will make a decision on the request in the coming weeks, Morales told reporters later at the same event. “We need to move fast on it because demand for gas is already increasing,” he said.
Morales said that the extra funding is not required for the deepwater gas field of Lakach, where the company estimates to produce more than 700 million cubic feet per day, because it was already included in the 2013 budget. The request is for projects halted projects after the drop in gas prices, he said.
“We have the gas, there waiting, but we need the extra funding to get it out,” Morales said.
To contact the reporter on this story: Carlos Manuel Rodriguez in Mexico City at email@example.com
To contact the editor responsible for this story: James Attwood at firstname.lastname@example.org