Deepwater Outlook: Ambitions, Challenges and Timelines

A panel of leading industry experts took the stage at the Mexico Oil & Gas Summit 2018 on Thursday to discuss the country’s outlook for its nascent deepwater activities. On Day 2 of the exclusive event at the Sheraton Maria Isabel in Mexico City, moderator Jesus Lamas, General Manager of Schlumberger Mexico and Central America, and panelists Monica Bøe, Director General of Statoil Mexico, Evelyn Vilchez, Director of Chevron Energía de México, Sergio Limardo, Country Manager of Repsol Exploración México and Erik Finnstrom, Senior Vice President of TGS discussed the ambitions, challenges and timelines related to deepwater exploration and discovery.

With the allocation of PEMEX’s first-ever deepwater farm-out, deepwater Mexico is just beginning to show the potential that lays hidden beneath the surface. According to data from CNH, approximately 25 percent of Mexico’s prospective resources are located in the deepwater Gulf of Mexico but before the Energy Reform it was almost impossible for the NOC to conduct exploration and appraisal activities in this sector by itself. This niche in the Mexican oil and gas industry represents a great challenge, and at the same time a great opportunity, for the country and for the companies that are bold enough to venture into an unexplored environment.

During Rounds 1.4 and 2.4, CNH awarded 27 deepwater blocks to major oil and gas companies. As these IOCs work to get their exploration plans approved, the challenge is to reduce CAPEX and OPEX, tackle technical hurdles, introduce state-of-the-art technology and apply best international practices to untap the enormous potential of deepwater Mexico. To ensure success, IOCs need not only top technology but a top-tier supply chain that contributes to reducing costs and delivering every phase of these contracts on time and on budget.

Deepwater exploration success stories take time to materialize as activities in these areas are slower and, internationally, are only just beginning to pick up after a long downturn. Nevertheless, major oil and gas companies are eager to place their bets on Mexico to discover the country’s true and full potential.