COMESA Expands Its Portfolio of Activities

Q: You argued that in order to ensure that Pemex continues to fully exploit the new opportunities discovered in 2012, it must double its exploration budget. How should Pemex allocate the additional annual investment?

A: The assets that most demand this investment are the ones where Pemex is already producing around 70% of its crude: Cantarell, Ku-Maloob-Zaap and rest of the Campeche Sound. In the last 4 years, a lot of satellite fields in the Bay of Campeche have been discovered, including new giants Ayatsil-Tekel and Tsimin-Xux. All these new discoveries onshore in shallow waters will require additional investment to appraise and to delineate before development. Onshore southeast Mexico contributes 20% of total production with mostly light crude oil. Onshore north Mexico, including Chicontepec contributes with the final 10% of total production. Chicontepec requires a new fresh approach but golden lane Mesozoic fields o†er good opportunities to increase production in short time.

Q: It could be argued that the current contribution to total production of various regions should not be the main factor for the allocation of exploration budget. What would you say to this?

A: I would argue that if such large discoveries have been made in the region, then more work should be done to appraise and define the behavior of the assets, and that has to be done through further exploration.

Q: Access to new technologies has played an important role in Pemex’s recent exploration success. What are the most important technologies that you have introduced recently, or plan to introduce in the coming years?

A: We are right now getting ready to sign a large contract with Pemex related to acquiring o†shore massive VSD 3D studies in order to reduce cycle time for the appraisal of new discoveries. This is going to be important, because, for example, in deepwater areas 80% of the identified potential reservoirs are composed of clastic rock. When dealing with massive carbonates like Cantarell, it is not hard to get a very good seismic image resolving on the reservoir. But when you change to clastic, you need to use di†erent technologies to deal with thin and heterogeneous reservoirs. Traditionally, after making a discovery you need to obtain new seismic data, which means that the contractor needs to mobilize a vessel, shoot the survey, and process the data. After that, Pemex goes into interpretation, which takes at least 18 months. But the speed can be increased by using new technology such as massive 3D VSP massive, which can lead to a better image of the 4-5km surrounding the discovery within six months. This increases the confidence for the selection of the location for an appraisal well, meaning that these deepwater assets can be put into production much faster than with conventional means. Then, early production can be reached with the use of an FPSOs.

Q: Does Comesa still have the ambition to become an operator in Mexico?

A: We hope to take this step in 2014, with Pemex’s full backing. Right now we are focusing on introducing new technologies like massive, seismic multicomponent VSP 3D and high-density seismic in mature fields. We will also be working on well workovers in order to develop the capabilities and experience required to become an operator. We need to have these skills in-house, and we also need to find the right partner to do this with.

Q: Pemex and the IMP have started to explore and define the potential in Mexico for shale gas. Were you disappointed that this job went to the IMP when Comesa could have done it?

A: We actually formed a consortium with the IMP, who will administrate the budget provided by the Energy Ministry and Conacyt. We will shoot 1,000km2 of new 3D seismic in northeast of Mexico, with the potential to acquire an additional 1,000km2 in the Eagle Ford complex that extends into Mexican territory. We intend to be active in acquiring the seismic data that Pemex will use to develop shale gas. Shale gas and oil is a big challenge for Mexico, we are very pleased to collaborate with a highly recognized institution like the IMP.

Q: To obtain more shale gas experience, Comesa also worked on the US side of the border recently. What are the challenges and benefits of enabling your people work outside of Mexico?

A: When you face a new challenge, there are at least two natural human reactions: fear and excitement. We are trying to support our people to make the most of the exciting side of the opportunity. We arranged a special visa for our people to perform their jobs over there, and we are moving step by step. We are also participating in bids in Colombia and Bolivia for the processing and interpretation over more than 50,000km2 of 2D seismic. Through these contracts for data interpretation, we are trying to internationalize our operation. We have a strong skills set to apply in other countries, and are able to extrapolate quite easily the deep knowledge of our experienced team based on decades of working for Pemex. As a small company, we are not particularly well-known in the US. It has not been easy to convince companies to work with us, but we have been demonstrating our expertise through pilot projects at no cost to our clients, and although it has taken a year, the strategy has proven to be successful.

Q: What are the main priorities for Comesa in the coming years?

A: We have proposed to our board that at least 10% of our income in the next 5-6 years must come from international operations. It is not a big e†ort, but we are moving step by step in order to reach this target. As a state-owned company we are restricted in many di†erent ways when it comes to moving fast and operating in this type of situation, but we are changing the culture and spirit of our sta† in order to capture new opportunities based on our knowledge and technology.

Seismic operations in Mexico will remain our main business, representing around 70% of income and revenue, but we are diversifying both our clients and services in order to assure Comesa’s long term sustainability.