The International Institute for Sustainable Development (IISD) says Mexico's oil and gas production targets would need about $160 billion in capital spending, nearly $110 billion of it from Pemex. The group argues the money would do more for energy security if it went to grids, distributed solar and storage.
The IISD says hitting Mexico's oil and gas targets would require around $160 billion in capital expenditure, including nearly $110 billion from Pemex. The institute adds that the plan involves developing uncommercial fields that could generate net losses of $17.4 billion over 15 years.
Even with that spending, the IISD says production targets may not be met within the planned timeframe.
Mexico's import dependence and thin gas storage
Mexico is dependent on oil and gas imports for two-thirds of its energy consumption, even though it has abundant domestic fossil fuel resources. The country also has just 2.4 days' worth of gas storage capacity, which leaves it exposed to supply shocks and market volatility.
The government has responded by working to increase national energy output, especially oil and gas production and refining capacity. The IISD calls that strategy misguided, saying such targets would come at very high costs and produce limited energy security gains.
Environmental concerns over the Pemex-Petrobras deal
Environmentalists have also raised concerns about a two-year partnership between Brazil's Petrobras and Pemex signed in June. The deal aims to explore mature and deepwater oilfields in the Gulf of Mexico, and critics warn it could derail decarbonization commitments, raise the risk of oil spills and displace coastal communities.
Renata Terrazas, vice president of the Mexican branch of the marine environmental group Oceana, told Mongabay: "There’s no transparency about what this actually means".
The IISD's alternative: grids, solar and storage
Instead, the IISD suggests Mexico build out and refurbish energy grids and transmission infrastructure, expand distributed solar and other renewable energy, and increase energy storage. Report co-author Luis Martínez said such investment can cut imports, strengthen sovereignty and attract private capital.
Source: Oilprice.com
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