MATA HITS A DRY HOLE, PEMEX HALTS GULF OPERATIONS ON MATAMOROS OIL TERMINAL, WILL IMPACT PORT BROWNSVILLE

Various Sources

After five years of working on the construction of an oil and gas terminal in the port of Matamoros, Pemex, Mexico's national petroleum company, has cancelled the concession to build it citing dwindling oil receipts and a glut of oil on the wold market.

Arturo Gómez Ibarra, Mexico's Secretary of Employment and Economic Development, confirmed to Mexican media that the Matamoros terminal work would cease and – barring any foreign or national private investment – would remain cancelled indefinitely. The terminal was being built to handle expected production in massive deposits found in the deep gulf in 2016.

On September 2016, Pemex said in a statement that the deposits were found in two areas: deep waters off the coast of the northern state of Tamaulipas and shallow waters off the coast of Veracruz and Tabasco states.

The company says a deep well 135 miles off the coast of Tamaulipas found a deposit that could produce 15 million barrels of light crude per day and would have a total reserve of oil equivalent of 140 million to 160 million barrels.

The shallow well found light crude and gas reserves totaling 50 million to 60 million barrels.

In April 2016, Mexico's government announced $4 billion in aid for Pemex, hit by falling oil prices.

Gomez Ibarra said Pemex made the decision to halt work on the terminal after its oil revenues fell by more than 60 percent over the last three years and the Tamaulipas were ordered halted. The cancellation will be implemented over the coming months and will not resume unless the oil market improves and more revenue is forthcoming.

Already, government officials are hoping that private capital can be attracted by the project and will invest to finish the facility. Matamoros port officials will have to attract foreign investors to make this happen.

 Gomez Ibarra said that at least four foreign investors have indicated interest in started operation there if and when the port terminal was finished.

State officials will decide whether the $51 million-peso outlay from his department will be used to move the construction along or direct to other obligations.

Eduardo Montes, an energy expert and consultant, said that Pemex's withdrawal from the terminal project will negatively affect the facility's construction since the national oil company's participation was the anchor to attract foreign investors.

Another negative impact on northeast Mexico will be the outlays that Pemex paid municipalities so that necessary infrastructure for its operations could be built and maintained. This will, in turn, make the capital necessary to improve the local infrastructure unavailable.

With Pemex stopping the construction of the terminal, the nearest oil storage and receiving facilities are at the Port of Brownsville or further south on the Mexican coast like Altamira or Tampico.