Luis Vielma
CEO
CBM
/
Insight

New Market Scheme Opens Possibilities in Mexican Fields

Wed, 01/22/2014 - 12:41

The criteria by which PEMEX decides which fields to request or surrender in Round Zero are rather simple in Vielma Lobo’s opinion, as its portfolio is defined and reviewed on an annual basis. Vielma Lobo recognizes its talent when it comes to shallow water exploration and production. “PEMEX has to keep these areas, as they will provide the bulk of the nation’s overall production.” He also points out that the oil company has an outstanding set of competencies to deal with mature reservoirs, which amount to 80% of the country’s producing fields, and raises the question of which mature fields PEMEX would like to continue exploiting. “I would say it should keep those areas that are crucial in terms of production and competitiveness, which excludes several fields with low production to cost ratios.”

Even before the Energy Reform was drafted, PEMEX and the government established that deepwater and unconventional reservoirs would be opened to private participation. Vielma Lobo points out that the Gulf of Mexico is a very attractive zone for IOCs. “The frontier area between Mexico and the US has several reservoirs that remain largely unexplored and unexploited. The companies that have been producing and exploring in the US side know that those reservoirs and formations extend across the border line. They would be interested in forming a joint venture with PEMEX, especially now that the Energy Reform has brought more clarity and extended contracting options.” The Perdido area, where PEMEX E&P has already found hydrocarbons in five wells, is a different case. “It makes sense for PEMEX to try to keep Perdido because of the success it has had there,” says Vielma Lobo, adding that the Mexican oil company might also keep some of its exploration projects in the north, such as shale fields in Tamaulipas and Coahuila. These are extensions of the Eagle Ford Shale, making it logical for companies with unconventional experience in the US side of this formation to partner up with PEMEX. In Vielma Lobo’s perspective, PEMEX should dedicate between 70% and 80% of its investment budget to fields it has operated for years and devote the rest to new deepwater and shale opportunities.

Vielma Lobo sees the Southwest Marine Region as being of great appeal to PEMEX, yet it remains underexploited in comparison to international efforts in similar areas. 

“Because of the opportunities, that await PEMEX could gain lot by keeping those areas for itself, provided that it brings in additional technology to help overcome domestic shortcomings,” says Vielma Lobo. “First, drilling has to become more efficient. PEMEX has been rather unsuccessful with the wells it drilled in its Southwest Marine Region. Different well architectures could probably lead to greater achievements. The time is also right to start analyzing how to carry out secondary recovery processes in the area. Many people, even those with knowledge in the oil industry, think that secondary recovery processes have to be implemented when a field starts to decline. The ideal situation in reservoir management would be for every single extracted drop of oil to be replaced with a drop of something else to help preserve the reservoir’s energy. This is what I mean when I say the time is right to start secondary recovery projects in those reservoirs, and I think PEMEX will seek to do that.”

“At first glance, reservoirs with high viscosity crude could be granted to international players due to the complexities of the production process,” says Vielma Lobo. “However, Ayatsil-Tekel and Samaria-Luna are valuable opportunities for PEMEX in spite of their heavy crude. Samaria-Luna has given PEMEX experience in onshore heavy oil extraction, as a few of its pilot projects have evolved into continuous works at three or four fields. Fortunately, PEMEX is gaining the necessary experience to move forward in this area,” Vielma Lobo professes. Mexico has to define if it is going to sell heavy oil or if this oil is going to be processed into a lighter mix before being marketed. Vielma Lobo believes using Ayatsil-Tekel’s oil as a replacement for Maya crude mix would be an affordable option.

“PEMEX may not be aware of the precise amount of reserves that Tsimin-Xux, Ayatsil-Tekel, and Lakach contain yet. However, experts are already talking about 2 billion barrels in reserves. These numbers could probably be doubled once the company amplifies its scope through delineation wells,” says Vielma Lobo. “Tsimin-Xux is an excellent field because of its light crude that is relatively easy to produce.” From the technological standpoint, this field’s oil does not pose a significant challenge for PEMEX. This is not the case for Lakach, an important gas field. “Maybe Mexico will have opportunities to develop unconventional gas shale fields in the future, but Lakach has the most accessible gas reserves discovered so far,” says Vielma Lobo. In his view, the fields of Tsimin-Xux, Ayatsil-Tekel, and Lakach should be seen as the keystones of PEMEX’s future and must continue to be developed under the correct approach.