Reinvigorating Mexico’s Mature FieldsWed, 01/22/2020 - 07:09
Q: What is the estimated timeline for production of Roma Energy Holding’s Area 16, Paraiso field?
A: Roma Energy Holdings won the Paraiso area in Round 1.3 as part of a consortium formed by ION Geophysical, Tubular Technology and ourselves; however, we now own 100 percent of this block. Because not all secondary laws governing the development of blocks were approved prior to Round 1.3, the processing of the MIA, SASISOPA and all other paperwork could not be approved in a timely manner. Paraiso is in a sensitive area in Tabasco, located only 6km from the new Dos Bocas refinery and close to protected mangroves, so we had to comply with many regulations.
We have received these approvals and now we can move forward. Building the platform and carrying out civil works will be the next step. Early production facilities and modular systems will be constructed. The Paraiso block already has two wells that produced for PEMEX between 1969 and 1978, after which they were abandoned due to a mechanical problem. The company will target a Miocene rock layer with the first five wells that we will drill on this block. Later during our 25-year lease of the block, we will target a Cretaceous layer at a depth of 7km. These wells will be high pressure, high temperature and, considering our decision to use directional drilling to reduce potential damage to the surrounding area, will be technically challenging. The technical difficulty and cost, which may be as high as US$30 million each, means it is more prudent to wait.
Geophysical data has been collected and made actionable on the five wells we are planning. The company is holding 20 bidding processes for service contracts of various types, including drilling and rig rental, all of which we expect to have in place toward the end of 2019. Although we had an MOU in place with Halliburton to carry out the drilling, permits took longer than expected to arrive and the window to work together was lost. For Paraiso, we believe that we should begin work before the end of 2019 and that, once in operation, each well will produce around 1Mb/d.
Q: How is the company bringing positive social benefits to the local Paraiso community?
A: I was born and raised in Tabasco, so having a positive social impact on the local area is important. To this end, we have been working closely with local landowners to ensure our land-use contracts are sound. Part of our commitment is employing local people to carry out necessary civil works to prepare the worksite to the required standards and, due to the coastal location of the field, stabilize the ground for our platforms. The civil works will be extensive, including the leveling of ground and paving of new roads.
Q: How is the consortium-owned VC01 onshore block developing?
A: Roma Energy Holdings is an operator on Area 6, VC01, located in the Cordoba Basin, which we won in Round 2.3 as part of a consortium made up of Tubular Technology, Suministros Marinos e Industriales de México, Golfo Suplemento Latino and ourselves. The consortium was slowed in its plans when we tried to transfer PEMEX’s regional block. Because the permit includes other blocks that we do not control, the transfer was rejected and we were forced to start again. The consortium has completed its paperwork and is now awaiting approval from the authorities. We hope to begin production on VC01 at the start of 2020. VC01 is a large block and has three fields that PEMEX developed from the mid1960s to the 1980s. The consortium will first carry out five workovers to stimulate production of existing mature wells, as well as drilling at least one more exploration well.
Q: How has Roma Energy Holding’s relationship with PEMEX changed with the arrival of the new administration?
A: We have focused on maintaining our relationship with PEMEX following the change in administration. Like other operators, we were relieved that no contracts were altered and the administration’s changing approach to private industry is a reason for optimism. PEMEX’s decision to focus on shallow waters and onshore offers more good news.
Roma Energy Holdings is an E&P specialized company, active in both Mexico and the US. It employs over 600 personnel. The company operates two mature onshore blocks in Mexico, applying a technology-driven approach to redevelopment.