Monday, January 2, 2012

Oil & Gas - Mexico - Pemex set to meet CNH's 2011 annual gas flaring limits

By David Biller?/?Business News Americas

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Mexican state oil company Pemex's flaring and venting levels - both at its Cantarell field and its other fields - have again exceeded upstream regulator CNH's imposed monthly limits, but preliminary statistics indicate the NOC complied with the 2011 annual limits, according to a CNH report.

Average flaring and venting at Cantarell in the first 10 months of the year was 141Mf3/d (4Mm3/d), just below the 142Mf3/d goal for the year. Flaring and venting at all other fields averaged 128Mf3/d, 5% below the programmed 134Mf3/d.

Flaring and venting between Cantarell and other fields dropped from a combined 198Mf3/d in October to 173Mf3/d in November and 130Mf3/d in the first 18 days of December, according to a separate CNH report.

CNH will thus not find itself in the position to impose sanctions on Pemex for failure to comply with annual limits.

CNH, which was established under the energy reform passed in May 2008, published regulations for Pemex's gas flaring in 2009. Mexico-watchers have doubted the regulator's capacity to rein in the state giant that had previously operated without oversight since its creation 70 years prior.

Pemex's flaring problems stem from the production of nitrogen-rich associated gas in the northeast marine basin - primarily the prolific Cantarell field - that exceeds processing capacity. The high nitrogen content results from the gas injections conducted over past years in an attempt to keep oil production levels up at Cantarell, which is in its phase of natural decline.

CANTARELL

Pemex's Cantarell field fulfilled CNH's monthly natural gas flaring and venting limit in June for the first time when levels reached 146Mf3/d as compared to the 164Mf3/d programmed limit. The average in June brought Pemex's 1H11 flaring and venting just below the 157Mf3/d programmed limit.

Pemex failed to meet the regulator's 2010 requirement for Cantarell that 96.5% of gas be utilized by December that year. Having concluded the process of reviewing its requirements with Pemex in May, CNH began calling for the company to gradually reach the 96.5% level by October this year, and the regulator said the company had complied with that requirement.

OTHER FIELDS

Pemex was in compliance with CNH limits for all other fields through July, when total flaring and venting was 105Mf3/d, 19% below the programmed limit.

However, flaring and venting from August-October has exceeded CNH limits. Average flaring and venting was 132Mf3/d, some 18% above the limit.

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