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News Article

Potential Surpasses Challenges in Deepwater

By Pedro Alcalá | Wed, 07/14/2021 - 20:09

For many years,  the speculative nature of deepwater development in Mexico has rendered discussions surrounding its potential into somewhat vague and even at times repetitive musings, nevertheless, the latest results from operators in this category has generated a renewed interest for this type of activities. Appropriately, the new balance between opportunities and challenges ahead for this subsector was the main subject of discussion during the last panel of Day 1 of Mexico Oil and Gas Summit 2021, titled “Deepwater: Who, Where and When?”. 

The panel was moderated by Valeria Vázquez, Energy and Resources Leader for Mexico and Central America at Deloitte. She began by establishing the richness of deepwater resources in the Mexican side of the GOM, only matched by their unexplored nature. There is a notable lack of knowledge and geological data when compared to the American side, despite the fact that the Mexican side might prove to have much more potential. With this in mind, Vázquez began by asking panelists what role they have each played to contribute to the further growth of this breadth of knowledge.

Panelist Dr. Alma América Porres, Commissioner at CNH, explained the role the Commission has played as a regulator in incentivizing the recent exploration success that deepwater operators have enjoyed. “Since 2019, operators have explored 11 prospects and discovered resources in 5 wells in the southern Gulf of Mexico. This demonstrates a 45 percent success rate,” said Porres. Most of these discoveries have been in the Perdido fold belt area, but have not been exclusively limited to it, since the Salinas basins can also be included as a prominent area.  

An operational role was detailed by panelist Carlos Ortiz Reguer, Chairman for IADC at LATAM and Marketing Director for Transocean, who narrated the history of his company’s involvement in Mexico’s deepwater sector. Transocean broke ground by bringing in their Deepwater Invictus vessel to develop deepwater assets in Mexico, which drilled a number of important wells in the Trion asset, among them the first ultra-deepwater well in the country’s history. “Transocean has been instrumental in the technological development of Mexico’s deepwater from the beginning,” said Ortiz Reguer.

Panelist Chris Brinzer, Exploration Manager for Petronas, highlighted their role as an NOC that contemplated Mexico as a worthwhile international investment. As a 100 percent state owned oil company, Petronas has to evaluate its international portfolio through specific criteria, and the fact that Mexico has not only fit that criteria, but become a key part of that portfolio, has gone a long way towards promoting investment in this particular segment of Mexico’s oil and gas industry, according to Brinzer. “Mexico is very important to our international portfolio, as we believe it has significant exploration and deepwater potential.” In fact, Brinzer claims that Mexico, represents the largest exploration portfolio for Petronas’ international assets. 

This question of asset evaluation was also brought up by panelist Luiz Feijo, Director of Global Offshore Production at the American Bureau of Shipping or ABS. Feijo explained that, in his experience, the criteria used by operators to determine which asset to develop was extremely complex, but that safety has always been at the top of those priorities, and Mexico has fulfilled those expectations. “Profitability is important, but you cannot risk the safety of your people or the environment.” He also mentioned that as deepwater activities continued their progress towards a productive phase, many elements had to be considered by operators when it came to determine what kind of production facilities they would be working with. These factors include the type of storage they would need, the choice between offshore processing and the use of pipelines and underwater ducts, the kind of weather they would be dealing with (which in the GOM means contending with hurricane season), the expected longevity of the assets, and the way in which technology would be applied to integrity asset management and the mitigation of risk.  

Panelist Bud McGuire, Mexico COO of Alpha Deepwater Services, also noted Mexico’s deepwater richness in the context of the 12 years that his company has spent developing deepwater assets in Mexico working together with PEMEX and witnessing those prospects mature up close. “Mexico has world-class deepwater potential, most of it remains unexplored. This is a great opportunity to use new technology to improve drilling.” This led to the question of technological challenges and applications that this category of activity represented, and here McGuire highlighted the importance of the latest seismic technologies, which include improved imaging of complex and subsalt structures and the use of full wave inversion to better understand resources located below salt formations. These kinds of exploration applications can also help operators understand the difference in reservoir pressures, which can sometimes make data interpretation much more difficult according to McGuire. Brinzer agreed with McGuire, adding that the amount of data that has been made available through these and other exploration technologies, such as wide azimuth seismic, has been decisive in the success of operators. 

Regarding technological challenges, Ortiz Reguer explained the new hardware that has become common in deepwater vessels and platforms, which in some cases includes components originally designed and developed for use by NASA space shuttles. This included a number of robotic and AI-based applications that removed the need for human intervention and interpretation in certain high-risk areas of work, adding that “robotic consistency enhances efficiency which translates to big cost savings.” In general, Ortiz Reguer expressed enthusiasm about the technologies being developed. “There are new technologies that offer great economic and efficiency advantages. The key to success in these investments is having a long-term commitment.”

Pedro Alcalá Pedro Alcalá Journalist and Industry Analyst