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Mexico's Alfa unit suspends some U.S. oil projects

26/02/2016
20:55
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Investments in certain fields no longer make sense with oil trading at US$35 a barrel, said Armando Garza, the company's president.

Mexican conglomerate Alfa on Thursday said its energy services unit Newpek suspended some exploration and drilling projects in the United States in the face of the persistent fall in petroleum prices.

Investments in certain fields no longer make sense with oil trading at US$35 a barrel, said Armando Garza, the company's president. Crude oil prices have tumbled by more than two-thirds since 2014.

Alfa holds mineral rights in southeast Texas - in the Eagle Ford, Edwards and Wilcox fields - as well as in Oklahoma, Kansas and Colorado. Garza said at least the Eagle Ford field was now off the table.

The chief executive of Alfa, Álvaro Fernández, clarified that the company would keep production at its existing 610 wells in the United States but would make no new investments.

Alfa said it expects single-digit growth in earnings in all of its businesses this year, except for Newpek. Revenues for that unit are expected to slump 36 percent versus last year.

The company also controls petrochemical, car parts, telecommunications and refrigerated food businesses. 

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