Prospects Maturing in World-Class Blocks

Q: Cairn works on Blocks 7 and 15 as an operator and on Block 9 as a partner. How are these blocks developing?

A: The last year has been eventful for Cairn Energy. A year ago, we had just been awarded Block 15 and were waiting to sign the contract while putting together the exploration plan; it was early in the process. A year on, we have an approved plan and maturing prospects on the block. 

On Blocks 7 and 9, we are further ahead. Our plans were approved in 2018 and had already put together the strategy we will follow for well and prospect development. We contracted the Maersk Developer rig on Block 9 and became deeply embedded in the minute logistics of drilling our well. In both 7 and 9, we have matured our prospects and recently obtained more information through site surveys that have improved our understanding of the prospects ahead of drilling activities. Together with our partners, we expect to drill three exploration wells this year.

Q: What are the differences and similarities between the two basins in which Cairn Energy works, the Sureste and Tampico-Misantla basins?

A:  The similarities between Sureste and Tampico-Misantla are greater than their differences. They are proven, prospective basins, neither of which have been exhaustively explored. Historically, Tampico-Misantla has been the more active area of production but since the Energy Reform, more significant discoveries have taken place in Sureste. There are similar challenges in both basins, including limited infrastructure. This means we will operate as if they are emerging basins, even though we know the resources are there. These blocks should certainly be considered world-class.

Q: Cairn Energy is partnered with Eni and Citla on all of its blocks. Why did Cairn Energy decide to work with these different companies?

A: Both our partners are very different and bring unique skills to the table. Eni is a huge, well-established company, whereas Citla is a new Mexico-based venture. Our relationship is productive and complimentary because it generates creative ideas and robust discussion on how to move forward. This interaction and the way our diverse consortium membership has worked together have generated value for us all. This has been a great partnership that has proven useful in maturing Cairn Energy’s presence in country.

Q: Why did Cairn Energy choose to contract the Maersk Developer rig and what does this offer to your operations?

A: We have worked with Maersk before and know the quality the company delivers, but the main reason was the alignment of both our interests. Maersk offered us the Developer, one of their newest and most modern rigs, which won Shell’s Rig of the Year title in 2018. The Developer has been working in-region, so it comes prepared to drill in Mexico, with the correct kit already aboard. It is a robust, latest-generation rig that is ideal for our environment. Maersk was also a willing partner, helping us put together a program that worked for us. The company is eager to break into Mexico and, through our partnership, we are creating value for both companies.

Q: How will Cairn address the shortage of offshore transport in Mexico once production on its blocks begins?

A: We are keeping an eye on discussions taking place between midstream companies and other offshore operators who are further along their developments. The fact that we entered Mexico on the second wave of early arrivals gives us the space to survey the situation regarding infrastructure and pipelines. While we are confident that the technical work we have undertaken to develop our prospects will deliver superb results, we have yet to make discoveries. Therefore, we have time and there is no rush. We are engaged and we are carrying out our due diligence but we will not jump into a decision yet. The lack of infrastructure on Mexico’s side of the Gulf of Mexico does not faze us. Cairn Energy has the appetite and ability to develop infrastructure when it is not available.

Cairn Energy is a British exploration and production company that operates exploration acreage in many of the world’s major gas fields. The company is the part of the consortium that operates the shallow water Blocks 7, 9 and 15.