Efficient regulation for Mexico’s upstream

Mexico

Rogelio Hernández Cázares, president-commissioner of the National Hydrocarbons Commission (CNH), talks to The Energy Year about how the CNH is encouraging investment and collaboration in Mexico’s upstream sector and maximising the value of the country’s oil and gas. The CNH is responsible for regulating Mexico’s hydrocarbons sector, as well as conducting research and promoting investment.

This interview is featured in The Energy Year Mexico 2023

What key levers is the CNH targeting to maximise the value of the nation’s hydrocarbons sector?
Within the strategic objectives of the CNH, two key elements are especially relevant in the framework of the current administration’s energy policy: the increase in hydrocarbons production and the restitution of reserves. Regarding production, during 2021 the average output was 1,665,000 bopd, remaining stable compared to the 2020 figure of 1,663,000 bopd.
In our analysis of prospective production at the end of the previous year, considering the base scenario, a gradual rebound in production is expected over the next three years. If this situation materialises, production will reach a level of around 1,900,000 bopd in 2024.
As for the evolution of 3P reserves, these remained stable as well. They reached 22,847,000 boe as of January 1, 2021. However, in this case, the indicator to be highlighted is the integral restitution rate of 1P reserves – the percentage of the volume of hydrocarbons extracted that is replenished by incorporating discoveries, delimitations, developments and revisions to reserves. While in 2019 this rate was 36.6%, in 2020 it reached 118.9%, and in 2021 it stood at 91.5%.

What are the commission’s objectives when ensuring the proper management, regulation and technical supervision of the different developments in E&P?
As of today, the commission rules on the development plans for hydrocarbons extraction in allocations [PSCs] and contracts. To guarantee the correct management, regulation and technical supervision of the different developments in the E&P sector it makes sure the development plans comply with the following terms: a technology and production plan that allows maximisation of the recovery factor in economically viable conditions; a programme for natural gas exploitation; and mechanisms to measure hydrocarbons production.
But above all, it ensures that administrative processes related to hydrocarbon extraction activities are carried out in accordance with the principles of transparency, honesty, certainty, legality, objectivity, impartiality, effectiveness and efficiency.

Which were the latest CNH deepwater development plans approved in 2022?
In 2021, and so far in 2022, two modifications to deepwater exploration plans have taken place, one by PC Carigali and one by function echoPub() {document.getElementById('pub').innerHTML="