At the end of March, global oilfield services giant SLB secured a significant drilling contract from Australian independent Woodside Energy for the ultra-deepwater Trion project offshore Mexico.
Located in around 2500 m of water in the Perdido Foldbelt, approximately 180 km off the Mexican coastline and 30 km south of the US maritime boundary, the US$7.2 billion Trion development marks a major upstream investment. Under the contract, SLB will manage the delivery of 18 ultra-deepwater wells, leveraging an integrated services model and AI-driven drilling technologies to enhance efficiency and well performance.
Petróleos Mexicanos (Pemex) still dominates the upstream market in Mexico, especially offshore, but its financial struggles and production decline have created space for more private investment and partnerships, albeit cautiously. Mexico’s landmark 2013 energy reforms opened the upstream sector to private and foreign investment, which led to some promising offshore discoveries. However, under President Andrés Manuel López Obrador (AMLO), new bidding rounds were frozen, and the policy stance doggedly favoured Pemex. This has slowed momentum and created investor uncertainty.
Mexico’s offshore Gulf of Mexico acreage is geologically promising, on par with the US side, but investment appetite hinges heavily on regulatory clarity and fiscal terms. Elections in summer 2024 made Claudia Sheinbaum Pardo the new President. During polling she expressed her determination to continue AMLO’s policies, particularly with regards to private investment in the country’s energy sector. Opposition candidates had argued for greater involvement of private firms in the energy sector and downsizing Pemex refining capacity.
Pemex has registered net profits in only three of the past 14 years (2012, 2022 and 2023) and is overwhelmed by debt and lower-than-projected crude oil production. According to the Center on Global Energy Policy at Columbia, crude oil production is an “area of concern. While the [AMLO] administration can be credited with slowing down the pace of decline registered in previous years, production increases (excluding condensates) have not been achieved. Between 2018 and 2023, crude oil production shrank by 0.22 million bpd, or 12%.”1
The task of turning Pemex into a profitable organisation that can stand on its own relies on a delicate balance of operational efficiency, strategic investment, fiscal discipline, and supportive policy reform, as well as meaningful collaboration with the private sector to bring in capital, technology, and expertise.
The resilience of offshore activity, despite the political challenges, is encouraging. There are some notable upstream offshore developments in Mexico that reflect ongoing activity and progress, including Talos Energy’s Zama field (a world-class shallow-water discovery), although it has been caught in a tug-of-war with Pemex over operatorship. Companies like Eni and Wintershall Dea have continued drilling and appraising offshore blocks, showing long-term commitment to the region. Mexico’s offshore upstream sector still holds promise, especially where earlier bidding round awards are being matured, even in a challenging policy climate.
I hope you enjoy this issue of Oilfield Technology, which covers wellsite monitoring, drilling performance, autonomous oilfields, FPSOs, subsea production challenges, and well pump operations.
