Betting on Technology to Yield Better Results

Q: What were PEMEX’s exploration highlights in 2017 and expectations going forward?

A: We focused strongly on shallow waters. We made some significant discoveries in these regions and are already working to drill some delimitation wells. One of the latest wells we are drilling in shallow waters is Yaxché, where we are testing pre-salt production. We have advanced significantly with this project and hope to be as successful as Brazil in this type of project. Pre-salt formations in Mexico are from an older geological age than in Brazil and we hope to generate data that will illustrate the great potential in these areas. We will not despair if this first project does not work, considering Brazil had to drill many wells to really take advantage of its pre-salt formations. But we hope the technology we are using in exploration will yield better and faster results.

Regarding onshore activities, we discovered the Valeriana field in Tabasco, where we are also drilling a delimitation well. This was a significant discovery worth approximately 200 million boe. We are still working on the southeast basin of the country, both onshore and offshore, and the Ixachi-1 discovery will play a significant role in our future activities. By the end of the year, we expect to have three wells in this field: Ixachi-1DEL, Cruver-1EXP and Ixachi-1001EXP. In drilling the latter, our goal is to discover another field deeper than Ixachi-1.

PEMEX’s exploration activities must focus on onshore and shallow-water projects because the industry is prioritizing fields with a short or medium-term ROI. Having said that, we launched operations in unconventional projects in 2018 and we are already drilling the Semillal-1EXP and Maxochitl1EXP wells. Semillal-1EXP is located south of the Burgos basin in Tamaulipas; it is part of a shale oil and gas field where we are testing a Pepper Shale formation from the Tithonian age. Maxochitl-1EXP, on the other hand, is part of the Tampico-Misantla basin and it is where we are testing the Oxfordian formation for shale oil and gas production. Maxochitl-1EXP would be the first well in Mexico to see a test of this formation and if it proves successful, it would increase the potential of our prospective reserves associated with unconventional fields. Our goal for the end of the year is to have six wells operating in unconventional fields. PEMEX is balancing its portfolio by focusing on known plays, including fractures and breaches from the Cretaceous period, the Kimmeridgian Late Jurassic age in the southeast basin, the pre-salt formations and the unconventional fields in Burgos and Tampico-Misantla.

Q: What are PEMEX’s plans for its deepwater projects in the Perdido area in relation to its consortium partners?

A: On the deepwater front, we are analyzing the possibility of reinstating the Nobilis-Maximino farmout. We are reviewing the concepts and the feedback from companies that declined to participate. Overall, we are revamping the project to make it more attractive and we expect to release the new farmout by November 2018. We still see potential in Nobilis-Maximino but we need to put a better structure in place for the tender.

Today, PEMEX has only one team operating in deepwater projects and we expect this will be sufficient to fulfill our commitments, both in the projects that were assigned to us in the Gulf of Mexico and in the blocks we were awarded during the deepwater rounds.

Q: What experience are you gaining through your collaboration with international players?

A: We are pleased that PEMEX’s team has the technical capabilities to work with these companies in line with international standards. All companies can learn new things from a technical standpoint but PEMEX has a good foundation. We are learning new ways to do business regarding contracts, JOAs, farmouts and farm-ins, and understanding how other companies see the business. These companies know that if there is any entity that knows the Mexican basins, it is PEMEX. Similarly, we know that foreign players know how to do business in a competitive environment.