PEMEX Reduces Well Drilling Time by 300 Percent

PEMEX CEO Octavio Romero Oropeza reported that the company has reduced its well drilling time by 300 percent since 2019. Shallow-water production and onshore well drilling have yielded positive results during the current administration. In addition to the decrease in drilling time, production has forged ahead by cutting 80 days and exploration time was reduced by 53 days on average, as the NOC’s exploration wells were incorporated into the production portfolio in record time.

Romero said that these are the fruits of the NOC’s Exploration and Production strategy and underlined the work optimization and cost reductions the company has carried out. From 2H21 to 2H22, PEMEX reported savings of MX$15.26 billion (US$758.21 million). The Fourth Governmental Report attributed the success to improved business practices, better contract negotiations as well as investment in infrastructure, operations and maintenance. PEMEX also reduced its spending by paying fewer taxes. The NOC’s Yaxché field is an example of the time reduction since each well there fast-forwarded its production by 64 days.

Nevertheless, PEMEX still has plenty of work to do to replenish its dwindling 3P reserves, experts said. The National Hydrocarbons Commission (CNH) reported that as of September 2022, the NOC and other IOCs had only invested one-fourth of the exploration and extraction budget approved for 2022. Oil and Gas Magazine reported that most of the approved investments are due for 2025. It lists Ek-Balam, Amoca, Miztón and Teocalli as the fields with the highest approved investments, though the latter two fields belong to Eni.

PEMEX is also running into complications developing the US$1.5 billion Lakach field, as CNH raised questions if the NOC could carry the investment of the expensive deepwater natural gas project, which it plans to take on together with New Fortress Energy.

Despite the achievements in shallow water, experts have repeatedly advised the importance of deepwater investment. The current administration keeps emphasizing its focus on debt reduction and its tried and tested methods. “As it stands, over half of all of Mexico’s conventional prospective resources are contained in deepwater, making such assets a crucial element for Mexico’s upstream future,” Mexico Business News. However, the Trión project with Woodside appears to be a major pathway for deepwater production, nevertheless it still has some time before it goes into production. More investment from the project is potentially scheduled for 2023.