José Antonio Escalera
Director of Exploration
View from the Top

40-Years Search Ends in Ixachi-1 Discovery

Sun, 05/06/2018 - 09:46

Q: How important will the Ixachi-1 discovery be for Mexico’s oil and gas industry?

A: The discovery at Ixachi-1 was extremely important for the industry. We have been searching for this prospect for over 40 years. Between 1982 and 1983, we drilled around 10 exploratory wells in the hunt for this field, known as the Native Block of the Cordoba Platform. I started my work as a geologist looking for this and now it is my ultimate responsibility as the head of exploration at PEMEX. Ixachi-1 has the potential to become a giant field with over 1.5 billion boe. We are already drilling two wells in the area: Ixachi1DEL, which will work as a delimitation well, and Cruver1EXP, which will define an extension of the field to the south. 

If we are successful with both wells, we will grow our national reserves significantly. Ixachi-1DEL will help us confirm our expectations for at least 350 million boe in the Ixachi field and Cruver-1EXP will allow us to determine Ixachi’s extension toward the south. If both wells confirm our forecasts, we could be talking about a field of over 1.5 billion boe. We are very proud of this discovery, particularly considering we had not drilled in the area for over 25 years. Moreover, this discovery is strategically placed, connecting the oil pipelines in the southern region of the country with those in central Mexico and the north. 

Q: What role did technology play in the successful Ixachi discovery?

A: Technology played a huge part in this discovery. The idea of the existence of a Native Block in the Cordoba Platform was born in the 1940s; we drilled many wells looking for it but without the right seismic data it was hard to find something of significance. All the data we generated back then was 2D seismic captured with the technology of the time. Now, we are able to use 3D seismic technologies and algorithms to gather the correct data to create a better image of the underground area and properly locate the block. We are collecting data from the northern to the southern parts of the region to determine the existence of more fields. We hope to make a discovery similar to the Cusiana field in Colombia. To achieve this, we are looking at the opportunity of exploring the entire front of the Eastern Sierra Madre mountain range. It is now CNH’s responsibility to determine the best way to explore the region, starting in Tuxtepec, Oaxaca, all the way to Monterrey, Nuevo Leon. There is definitely an opportunity to find new reserves in the region but doing so implies large investments in seismic data and geological modeling. 

Q: Is PEMEX planning to farm out Ixachi and other fields yet to be discovered?

A: PEMEX has enough experience in onshore fields with HPHTs. Given the high economic returns these projects could generate for the country, we would like to develop them on our own before exploring the possibility of a farmout. As we move along with the exploration phase, we will determine if we need economic or technological support from third parties. So far, Ixachi-1 is already active and producing approximately 10Bcf of natural gas and between 1,300-1,400b/d of condensate oil. We are in an extended testing phase approved by CNH and have been producing since April 2018. Since it is an onshore project, we have the advantage of being close to our infrastructure for other wells. 

Q: Where would PEMEX invest if it ireceives more resources from the Ministry of Finance for exploration? A: In 2017, we incorporated almost 1.2 billion boe/d as 3P reserves, which means we incorporated 100 percent of the produced reserves. We want to maintain that operational level but to do that we need a budget of at least US$2 billion and most of those resources would have to go to PEMEX’s whollyowned shallow-water and onshore operations, mainly in the southeast basin. In deepwater projects, we need to prioritize farmouts and share the risk of the operation. Through that strategy, we can wait for long-term returns in deepwater and realize short and medium-term returns from shallow-water and onshore projects.