A Flagship Project Powers Through CrisisBy Pedro Alcalá | Wed, 07/01/2020 - 11:38
Q: How are current world events affecting your plans for 2020?
A: The COVID-19 pandemic and the corresponding reduction in oil prices are challenges that few anticipated at the beginning of 2020. Nevertheless, our project execution efforts continue full steam ahead. During the second quarter we started drilling at the Ichalkil and Pokoch fields using a jackup rig in each field. Fieldwood’s first priority is always the health and safety of our employees, so we acted quickly and implemented strict precautionary measures to prevent an outbreak of COVID-19. We are currently testing 100% of personnel and contractors before they embark offshore or visit fabrication yards, and continue to closely monitor individuals with any potential symptoms.
During this first drilling campaign, we expect to drill and complete 6 new wells and tie back two appraisal wells drilled in 2017. In addition, we are fabricating the necessary infrastructure to support our production. This includes two fixed production platforms, one at each field, which will be interconnected to a PEMEX platform called Tumut. We are doing everything possible to maintain the project schedule and complete the commissioning of the facilities during the last quarter of 2020. Nonetheless, we acknowledge the numerous challenges that contractors are facing due to the pandemic, including equipment and permitting delays.
Another key milestone in the near term is finalizing agreements with PEMEX to utilize the Tumut platform and the execution of purchase and sale agreements for the oil and gas in order to start the early production phase of the project. By connecting to PEMEX’s offshore infrastructure we will be able to accelerate production from the fields by 2-3 years and contribute faster to the production goals set by the Mexican Government.
We are also finalizing the process of certifying the reserves for our contractual area. Our auditor is estimating 3P reserves will total 772MMboe, of which 81 percent is crude oil. This is great news for Mexico, because the project continues to be attractive even with the downturn in oil prices.
Q: How would you characterize your relationships with contractors?
A: We established strong business relationships during our appraisal stage and have continued to strengthen our vendor network by incorporating new contractors during the development phase. During 2019, we contracted two jackup rigs as well as drilling, completion and logistic services required to support our 2-year offshore drilling campaign. Contracting key services directly gives Fieldwood better control and flexibility to respond quickly to operational challenges that arise while drilling. In addition, we tendered an EPCI contract for the engineering, construction and installation of the production platforms and interconnecting pipelines.
We are constantly communicating with vendors and enforcing strict quality, safety and environmental standards. The comprehensive measures we implemented to reduce the spread of COVID-19 are a good example of Fieldwood’s steadfast commitment to the health of employees and contractors.
Q: How do you coordinate activities with the central Houston office?
A: Fieldwood, as one of the largest operators in the US GOM, has a vast talent pool with significant technical and operational expertise available for our Mexico project. We have a dedicated team of specialists and senior executives enhancing the value of the project and supporting the execution plan. In parallel, we have grown our presence in Mexico significantly over the past 4 years. Currently, the majority of the personnel working in the project are Mexican. Fieldwood remains committed to increasing its national content and thereby transfer knowledge to new participants in the oil and gas supply chain in Mexico. We do this by engaging with local vendors, including small and medium-sized businesses, and by providing extensive training. Our partner Petrobal also brings significant experience to the project as well. They have a great executive team with significant experience in carbonate fields and oil and gas operations in Mexico.
Q: Which items from your 2020 agenda are you watching most closely?
A: Supervising offshore operations takes up most of our time and attention, particularly in the midst of the pandemic. Even under normal conditions, drilling complex wells offshore (high temperature, low pressure) like at Ichalkil requires dedicating significant resources to ensure operational success.
COVID-19 has also made the permitting and authorization process more challenging since regulators have adopted different working calendars. Finally, another key item is our collaborative work with PEMEX to finalize the contracts required for early production. This is the first project in Mexico utilizing a fixed platform owned by a third party to be used as a selling point offshore.
Fieldwood Energy is a Houston-based E&P company focused on the exploration and development of offshore oil and gas assets in the shallow and deepwater Gulf of Mexico in both the U.S. and Mexico. In 2017, Fieldwood became the first US company in 75 years to drill an offshore well in Mexican territory.