Low oil production puts government revenue at risk: ASF

In an environment where Pemex Exploration and Production (PEP) did not have an institutional planning aimed at achieving its objectives, the downward trend of oil production deepened and if it is not reversed, it could put the supply of hydrocarbons at risk in the medium term and not meet the objective of maximizing the State’s oil income and thereby contribute to national development, warned the Superior Audit of the Federation (ASF).

According to the result of the Public Account 2019, Pemex will continue to be the main producer of the fuel, but from 2015 to 2019, crude oil production targets fell 21 percent, from 2,288 to 1,801 million barrels per day (mdb).

Likewise, the indicator “Production of crude oil” was established, with a programmed goal of extracting 1,801 mbd; However, at the end of 2019, 1,684 mbd were extracted, a volume that is 6.5 percent lower than what was programmed, so PEP did not meet the planned goal in a timely and efficient manner.

Lack of institutional planning

The ASF explained that the audit results showed that, in 2019, PEP did not have an institutional strategic planning aimed at achieving its objective of exploring and extracting hydrocarbons, as it defined exploration and production guidelines, and conducted its operations based on these, but there was no alignment of the objectives and strategies indicated in the PEMEX Business Plan 2019-2023 with the National Development Plan 2019- 2024.

It indicated that although PEP aligned the objectives and strategies of its Institutional Strategic Program with the Pemex Business Plan 2019-2023, it did not document the supervision of the implementation and compliance with this alignment.

In addition, he added, the lack of coordination between PEP and the Pemex Board of Directors to prepare and define the 2019 Pemex Annual Operational and Financial Work Program, applicable to its Subsidiary Productive Companies, Based on the information that the deputy directors of the exploration and production assets of PEP proposed to the general director of this subsidiary company, as well as to establish programmed goals in the same program.

Likewise, deficient planning was identified and a breach of the goals established in the 2019 Quarterly Operating Programs, since the agency did not comply with the provisions of these programs in the matter of hydrocarbon exploration and production, which denotes that the subsidiary company did not performed efficiently as planned.