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New Exploration Responsibilities for CNH

Wed, 01/21/2015 - 13:53

Q: How have your responsibilities at CNH changed in the exploration domain since the Energy Reform?

For the past year, I have been in charge of exploration activities, supporting the authorization for deepwater drilling, among other tasks. CNH has also supported SENER in the implementation of Round Zero and Round One, for which I was involved in defining and evaluating exploration projects, as well as in the analysis of prospective data. Given the amount of information available, many CNH specialists participated in the important task of analyzing the information provided by PEMEX. Another important topic, the development of exploratory studies and data acquisition in Mexico, was presented in January 2015. In consequence, we elaborated technical regulations to develop multi-client seismic and exploratory studies implemented through direct contracts with private companies operating in Mexico. Companies that participate in exploration will be able to independently sell all the survey data that they collect. Most specialized companies have serious interest in data acquisition in Mexico, including areas excluded from Round One. The companies that decide to participate in exploration activities will have to share the acquired information with CNH for free, but the regulating institution will not disclose the findings for an agreed period, maintaining a confidentiality that will allow companies to sell the information that they acquire. I also participated in the design, construct, and establishment of the Data Room, jointly with Oscar Roldán, the Director of Economic Evaluation and Statistics at CNH. The Data Room is a trendsetting project that was completed in a record time. The construction of similar facilities typically takes a year, but we completed this process in three months between October 2014 and January 15, 2015. We are proud to have developed one of the best Data Room centers in the world, with truly cutting-edge installations and state-of-the-art technology. It is very important to recognize that we have successfully accomplished the data transition, at least for the blocks included in Round One, from PEMEX to CNH. It seemed an impossible task given that no country in the world had managed to transfer this amount of data, representing almost 9PB, in such a short period of time. This process will continue to be implemented as the Energy Reform moves forward and the next bidding rounds are announced.

Q: Some companies have expressed disappointment at the information available in the Data Room. Has all the information that PEMEX had available been included?

A: CNH developed an inventory of all the information disclosed by PEMEX, although, of course, only PEMEX had previous knowledge of this data. CNH has acted in good faith, trusting that the inventory that PEMEX transferred to the Data Room is complete and accurate. In addition to providing all available data concerning the blocks included in the first phase of Round One, we also provided information about 30 wells in the region to offer geological correlation data, which is more information than what is normally provided in other countries. CNH has also created a Geological Atlas that is available online. This atlas includes a third of the information available in the Data Room, enhanced with geological and seismic interpretations from CNH’s experts and external counseling. We are offering this analysis to the companies and the general public, to demonstrate the quality of the information.

Q: During 2014, PEMEX did not announce any relevant discoveries. What do you think happened, and what does it mean for the future of upstream activity in Mexico?

A: In deepwater projects, PEMEX drilled wells according to its platform capacity. Of the four platforms operated by PEMEX, one has been focused on the development of Lakach, while the remaining three platforms have been used in Northern Mexico for the exploration of Exploratus, Trion, and Maximino, which were discovered in previous years. PEMEX drilled appraisal wells but the incorporation was minimal. However, it is clear that PEMEX’s deepwater exploration activities are successful given that its drilling success rate is above 60%, which is a major achievement compared with global standards. The problem is that this success is based on small discoveries and progress towards development and production is slow. In shallow water, PEMEX’s strategy has been concentrated on exploring areas adjacent to already known reservoirs, seeking extensions and adjacent reservoirs. A discovery under these conditions does not generate abundant resource incorporations. In this way, PEMEX has made discoveries and reserve incorporations, however, these have been minor and in known geologies.