/
Analysis

Main Shallow-Water E&P Activity

Sun, 07/01/2018 - 11:03

With a decline that does not seem like it will reverse any time soon, and stabilization the best-case scenario, the importance of making discoveries with the potential for an increase in both production and reserves replacement is critical for the country. Fortunately, the positive news is already coming as IOCs are already carrying out successful drilling activities in the country’s shallow waters. The first big news from IOCs in the country came with the discovery in the Zama-1 well, as it is said to be the biggest one made anywhere in the world in recent years. It was made by the consortium conformed by Talos, Sierra Oil & Gas and Premier Oil. These companies were assigned Blocks 2 and 7 in Round 1.1, and on July 11 2017, the consortium drilled the Zama-1 well in Block 7, hitting a deposit with an original volume of between 1.4-2 billion barrels.

In terms of production, contractor Hokchi Energy produced 4,201 barrels with a 29.4 API grade in April 2017, during production testing of the Hokchi-4DEL well located on the A2 block assigned to Pan American and E&P Hidrocarburos during Round 1.2. The Hokchi field contains a total amount of 21.25, 45.18 and 25.91 million boe in the form of proven, probable and possible reserves.

This year, there was also good news for PEMEX in shallow waters, as the NOC managed to start production in the Xikin-1DL, Hok-1 and Octli-1 wells. These three wells alone are currently producing 7,489b/d of crude and condensates and 5Bcf/d of gas. They contain 1P reserves of 55.85 million boe, 2P reserves of 78.39 million boe and 3P reserves of 128.66 million boe.

As activities increase in Mexican waters the outlook seems promising thanks not only to the discoveries and production performed in 2017 but also due to the attractiveness of the country compared to major investment destinations. According to CNH, the size of recoverable reserves from Mexican offshore discoveries is seven times larger than those in the US and two times greater than those in Brazil.

The institution also reported that, over the 1976-2016 period Mexico drilled only 316 offshore wells but produced 30,449 million boe. This equates to 96 million boe per well. In comparison, the US drilled almost 20 times more wells with 6,076 and produced only 19,503 million boe, an average of 3.2 million boe per well. Similarly, Brazil produced 10,834 million boe with 2,420 wells, an average of 4.5 million boe per well.