Luis Velázquez
Director General
Monclova Pirineos Gas
View from the Top

Piecing Together the Potential of Mature Blocks

Wed, 01/22/2014 - 11:29

Q: Why did you bid for the San Andrés and Tierra Blanca fields during the second round of ISCs?

A: We have a deep understanding of the way PEMEX is producing those fields. It lets its team at Poza Rica-Altamira produce the lower portion of the geological column, which is of Jurassic and Cretaceous origin, while the Chicontepec team produces the upper portion, which is of Tertiary origin. The bidding round in which Monclova Pirineos Gas (MPG) participated was headed by the people of Poza Rica-Altamira, who were not handling the upper portion. This led us to notice nearby fields in this area, conceding high potential to the Tertiary play. Other companies that did studies in the region did not pay attention to the Tertiary formation, thus MPG was able to maximize its potential without facing much competition. Some companies we talked to mentioned seeing the same pattern around in Tierra Blanca. Therefore, MPG does not see much potential for the small part of the Tertiary formation, although we assigned a high potential to Faja de Oro, an ancient coral reef that PEMEX has exploited for years. The reef reservoir is not easy to properly explore and evaluate but MPG stands ready to drill two development wells and an exploratory well. Some of the wells in the reef play have produced more than 20,000b/d of light oil, so we are betting on repeating the original success of Faja de Oro.

Q: What technological challenges and production opportunities did you identify in the Tierra Blanca and San Andrés blocks after the contracts were awarded?

A: MPG has only been studying the blocks for a few months. We are still learning about the difficulties found in these mature fields. The Tierra Blanca and San Andrés blocks have already been subjected to water injection and we need real figures on the volume of water used in order to move forward. We also need to know where the waterfront is in order to better plan the projects. The old wells in Tierra Blanca have posed some operational difficulties in trying to implement mechanical and other artificial methods of production. MPG has identified several technologies, such as the use of gas injection, which might not be very innovative but could be applied in both blocks, particularly in San Andrés. We can also drill horizontal wells in some of the Jurassic and Cretaceous reservoirs. We rely on chemical application in carbonate reservoirs to reduce the emulsification of oil and alter viscosity to improve flow. Through these two key techniques, MPG could optimize and increase production in these fields. MPG believes that, for San Andrés’ second phase of development, the previously applied EOR water injection project should be reactivated. It was very successful before floods damaged the water injection facilities and reactivating it will definitely increase the block’s production. Re-fracturing some of the wells is another option being considered, as well as the use of short radius drilling to reach new areas.

Tierra Blanca is a more difficult field to understand. We had certain expectations regarding its potential, but investigations showed that the wells are very old, making it difficult to find information about them. We had to change tack regarding artificial production methods in this block. MPG is in the process of implementing mechanical pumping techniques to increase production, but I believe drilling wells would be the best way to yield additional production in this field. We are planning to drill a couple of wells there in order to get a scope on the potential of its geologic structures. We still need to understand these fields better and consider the way PEMEX exploited them in relation to the waterfront’s location. Understanding the little information we have on Tierra Blanca has been difficult. Given the old age of its wells, formation damage is common. This complicates the characterization process, but also poses the challenge of considering further possible damage. MPG has about two years to properly decide whether to stay and develop this field or not.

Q: Is MPG using seismic imaging services to get a better idea of the potential these fields represent?

A: We processed information with a company based in Houston, enhancing the seismic data of San Andrés and applying seismic inversion. Since MPG has 3D seismic for the entire block, our team is working on interpretations to locate the reservoirs that should be present in the Tertiary formation. In addition, we are completing an integrated study to better define the Jurassic and Cretaceous formations, as we believe there is still potential for production there. MPG’s plans for the evaluation period of San Andrés have successfully been implemented, leading us to believe that this is a field the company should keep. We are using seismic inversion for Tierra Blanca as well but we only have 3D seismic data for 30% of the block. We have 2D seismic data for the rest of the area, but it does not adequately cover the terrain. There are plans to conduct a 2D seismic survey as 3D seismic is a very expensive tool to use in Tierra Blanca at the moment. If MPG does decide to develop it, a 3D seismic survey will be needed to better plan our operations.