Bringing the Caspian Model to the GulfThu, 03/08/2018 - 09:39
Q: How does Mexico fit into Lukoil’s global portfolio?
A: Lukoil started looking at Mexico six or seven years ago. Four years ago, after the Energy Reform was announced, we set up an office in Mexico City. We started looking very closely at the opportunities that presented themselves to participate in the licensing rounds. We finally succeeded last year after participating in different rounds alone and in consortiums, and we plan to continue participating. Right now, Mexico is not very material in Lukoil’s global portfolio but we look at this country as a region with high exploration potential. Recent announcements and discoveries give us hope that we are doing the right thing. So far, every well that has been drilled is a success. There have been two huge discoveries, which suggests the region will be prolific. The Mexican side of the Gulf of Mexico has great exploration potential for oil.
We will continue assessing all the upcoming rounds that will be announced. Definitely our main area of interest will be the shallow waters of the southern part of the Gulf of Mexico. The Perdido basin is deepwater, which is riskier, and if we participate we will do so with an operator. We are happy with our results so far and we are very excited to start drilling next year, if only because we are 20km from the 1.5 billion-barrel Zama discovery. We will continue to expand in Mexico and continue to try to increase our access to acreage for more drilling opportunities.
Q: What was your experience with the Amatitlan field?
A: With the Amatitlan field there has been a lot of discussion about the migration process of the contract. We acquired the block hoping for a fast migration. Several wells have been drilled and several wells are expecting completion as of May 2018. We have gotten an extension of the initial period. PEMEX and CNH have agreed to restart negotiations about the contract migration. We are working on provisional plans for the development phase and simultaneously working on getting the permits to drill the Pimienta shale formation to test the unconventional potential of the block. We have had a slow start but that was related more to uncertainty about the migration process of the contract. But now that the first contract has been migrated, in December 2017, things are looking favorable. We have had good results in Chicontepec and although the source rock is not very consistent, it produces. We are hoping to test Pimienta soon.
Q: Which project that you have been involved in internationally could you replicate in Mexico?
A: We have had very good results with our development in the Caspian Sea, which is the experience we would like to transfer to Mexico. We know how to build the infrastructure and how to develop fields in shallow water. Although we have had good experience with exploration projects in deepwater, in Mexico we are concentrating on shallow water. I think the Caspian Sea is a very good example of how we hope to proceed in Mexico.
Q: Could you talk about the considerations behind the bid for shallow-water Block 12?
A: We bid at 75 percent and one additional well. We have two structures and we will probably be presenting a staged exploration plan. Geological concept is proven by recent discoveries and we think about full development of the field. It depends on the results of the whole area as well since there is a lot of potential for cooperation between operators with regard to infrastructure in this area.
Q: How can Lukoil improve the quality and quantity of its yields as it consolidates its operations in Mexico?
A: In Mexico we are looking for more opportunities and we will be participating in Round 3.1. We think that after 2018 there will be a lot of activity in the aftermarket with farmins and farmouts so I think we will seek opportunities in the area to diversify risk and access different exploration projects. We will wait for the results of the drilling in the area but up to now the results have been amazing.