Gulf of Mexico’s Deepwater Exploration Opportunities EndureBy María José Goytia | Thu, 09/22/2022 - 17:54
The oil potential in the Gulf of Mexico presents interesting opportunities for Mexico to strengthen its production capacity in the coming years. Exploiting this promise requires close collaboration between authorities and the private sector. The creation of synergies between both groups opens up unique business opportunities for the country's oil sector, said leading IOC Murphy Oil.
Murphy Oil is an independent exploration and production company, with an advanced portfolio of projects, onshore in the US and Canada and offshore in the deep waters of the Gulf of Mexico. Production is split into three areas, including the unconventional onshore US-based Eagle Ford Shale, where the company produced 36.4Mboe/d in 2Q2022, comprised of 72 percent oil volumes and 86 percent of liquids volumes. Murphy also produces from two onshore unconventional plays in Canada: Tupper Montney, which produced 275MMcf/d in 2Q2022, and Kaybob Duvernay, which produced 7.3Mboe/d in 2Q2022. Finally, in the US Gulf of Mexico’s deepwater, Murphy is the fifth-largest producer with 70.2Mboe/d in 2Q2022. Here, it is executing major projects on schedule: like the clustered development of the Khaleesi, Mormont and Samurai fields.
Murphy has a global presence in exploration, with an estimated 1 billion Boe of risked mean resources and more than 24,000km² across the Gulf of Mexico, offshore Mexico, Brazil and Vietnam. Murphy’s oil production by 2Q22 was equivalent to 163Mboe/d. The company’s proven reserves at the end of 2021 stood at 699Mboe, with Canadian onshore fields representing half of the figure. Meanwhile, the US onshore and Gulf of Mexico-based offshore fields account for the other half, with equal shares between the two areas.
The company’s strategy is based on three pillars: Delever, Execute and Explore. "Despite being a small company, Murphy has demonstrated the quality of its operating capacity over the past few years, which is comparable to that of the oil supermajors. We are able to be faster and more efficient at times, even," said Gabriel Gomez, Country Manager Mexico, Murphy Oil.
Murphy’s worldwide deepwater experience includes the drilling of over 150 global offshore wells, having demonstrated the capacity to drill in water depths in excess of 3,000m and 8,500m below the seabed. The company has a history of innovation and technical expertise. “All these experiences and innovative methods are what Murphy is looking forward to bringing to Mexico,” said Gómez.
The company has established itself as a mid-sized player with excellent results in its exploration and exploitation operations. One of Murphy's great success stories is the Malaysian operation, carried out in conjunction with Petronas. The company made the first deepwater discovery in that country and was able to bring it into production in five years.
A recent project was the development of the Khaleesi, Mormont and Samurai fields, which reached production in April 2022. The King's Quay floating production system (FPS) interconnects the three fields via a cluster model. The development was brought online in a record time of 32 months, in contrast to the expected 36 months, and below budget. The FPS is currently producing 91Mboe/d gross from five wells, with 25Mboe/d net, of which 89 percent is oil. Completions are progressing on the sixth well, with one more remaining to be completed.
Murphy entered Mexico at the beginning of the oil rounds resulting from the 2014 Energy Reform, participating in the first shallow water round. At the first deepwater round, Murphy together with its partners Petronas and Wintershall Dea were the top bidders for Contract Area 5 of the Salina Basin.
The Block 5 contract was signed in March 2017 with its Exploration Plan approved in May 2018, starting the initial exploration period of 4 years. In 2019, the consortium drilled a discovery in the Cholula well which, together with G&G work, satisfied the minimum work program for this initial period. In advance of the initial expiry, Murphy and partners applied for the first additional exploration period of three years, which was approved by CNH, making Murphy the first private operator to be granted such an extension in a deepwater block.
During the additional period, Murphy committed to drill an additional exploration well, which will be fulfilled with the drilling of Tulum-1EXP. In June, Murphy received approval from CNH for the drilling permit for this well, which has an estimated cost of US$57 million. The mean to upward gross potential resource of the Tulum well ranges between 150MMboe and 350MMboe. The Valaris DPS-5 rig is expected to arrive in Mexico at the end of October 2022 toward this end.
Through the exploration of Contract Area 5 in the Salina Basin with the drilling of the Tulum well, Murphy hopes to progress towards consolidating its operation in Mexico.