Pemex May Not Return Production On Schedule as Experts See Issues Ahead

LOCAL NEWS

• Pemex efforts to restore oil output could lag projections for full operationality by Aug 30th following a platform fire.
  • Experts say reconnecting the 125 wells is more difficult than expected with CEO Romero's forecast being overly optimistic as controlling well pressure, re-establishing pumping systems and replacing burnt infrastructure haven't been completed
• Pemex has also been using nitrogen injections to restore output which could create complications down the line.
  • Nitrogen also disperses oil inside the reservoirs into several pockets, making exploration not only more difficult but also more expensive in the long term. Natural gas is usually used instead to create enough pressure to allow oil to flow out of wells
• AMLO replaces interior minister Olga Sanchez Cordero with Tabasco Governor Adan Augusto Lopez in the third cabinet change since June's midterm elections.
  • AMLO says this would help with the country's "transformation." Lopez is considered a close ally to AMLO and has overseen the Dos Bocas refinery project
• U.S. urges Mexico to clear migrant camps near border due to concerns they pose a security risk and attract criminal gangs. Officials highlight the city of Reynosa and Tijuana as key problem areas. This comes short after the US Supreme court ruled against the Biden administration on migration – opening up a move back to the Trump era "return to Mexico" policy

Data:

• 1200BST/0700ET: Trade balance exp at 33.4m vs 762m prior
• 1515BST/1015ET: Bloomberg Mex Economic survey