Development of Mexico's Hydrocarbon ReservesSun, 01/22/2012 - 09:15
Reaching an oil reserve replacement rate that exceeds 100% is a key priority in Pemex’s current strategy. For the past two years, the NOC has achieved this target while maintaining a stable production figure of between 2.55 and 2.58 million b/d. According to the company’s management team the commercial success of this year’s exploration projects has given the NOC enough 3P reserves to maintain energy sustainability for at least 30 years.
“The key factors that have led to success have to do with a constant and steady investment eort in exploration projects,” says Fluvio César Ruiz Alarcón, one of Pemex’s Professional Board Members. “When the oil price dropped to US$80, all investment was allocated to production activities to keep a healthy ROI. Slowly, with the increase in prices, the appearance of research funds, and through a strategy focused on exploration projects, Pemex has managed to achieve a 100% reserve replacement rate.”
Ruiz Alarcón believes that the most important objective for Pemex is to achieve sustainability in the future. “This can be achieved through continuous exploration investment and the evolution of industrial transformation and maintenance capabilities, which have seen little investment for many years,” he says. “We have seen important developments at Ku-Maloob-Zaap, while EOR techniques are being applied to increase production at more complex fields. Chicontepec’s production has risen within expected levels due to the results that the field lab strategy has yielded. Exploitation techniques have been enhanced, increasing the production volume per well drilled. Both of these fields have contributed a great deal to maintaining production levels while increasing the reserves through additional discoveries.”
The diversification strategy that Pemex E&P has followed in order to succeed at achieving both its reserve replacement and production objectives has altered the NOC’s cost profile for exploration and production costs. From finding and development costs (FDC) of US$13.48 per barrel in 2006, the NOC’s FDC have gone up to US$16.13 per barrel in 2011. This increase was driven mainly by the addition of deepwater and mature fields to Pemex’ portfolio, which bring with them higher costs for hydrocarbon detection, and require more complex and costly development strategies.
Production costs have also increased due to the growing complexity of Pemex’s producing fields. However, this increase does not mean that Pemex should stop investing in finding, developing, and producing hydrocarbon resources, no matter how complex the projects might appear, according to Ruiz Alarcón. “The expansion of the geological frontier through technology and the movement towards deepwater are leading the way towards heavier investments in exploration, thus allowing future energy stability for the country. Shale gas is another important piece in the learning puzzle, and its progress should be monitored, since the formations also promise to contain shale oil.”