Repsol Makes Deepwater Discoveries in MexicoBy Peter Appleby | Tue, 05/05/2020 - 12:46
Spanish IOC Repsol has delivered the first discovery in Mexico’s deepwater blocks with two discoveries in Block 29 in the Salina Basin, which the company and its partners won in Round 2.4.
The discoveries were made by the drilling of two wells, Polok-1 and Chinwol-1, which hit a depth of 2,620m and 1,850m respectively. Polok-1 presents a net oil column of more than 200m while in Chinwol-1 an oil column of 150m was found. Polok is situated within the Salina Basin’s Early Miocene reservoir, while Chinwol lies in the formation of the Pliocene.
This comes less than two years since Repsol (with 30 percent stake) and its partners, which now include Mexico’s PC Carigali (28.33 percent), Germany’s Wintershall DEA (25 percent) and Thai IOC PTTEP (16.67 percent), were formally given ownership of the block, which sits 88km into the Gulf of Mexico from the Tabasco coast.
Due to the positive results seen from both wells, which Wintershall DEA reports show “excellent petrophysical properties”, the consortium will now advance towards appraisal. Repsol itself has invested more than US$765 million in Mexico over the last two years and has recently been given approval from CNH to drill a third well in its Block 10 off the coast of Veracruz.
Block 29 is also some 50km west-northwest of the Block 7 Zama discovery, on which Wintershall DEA is partnering with operator Talos Energy. Progress on Block 7 is being held up by a disagreement between Talos Energy and PEMEX as to who owns the resources of the Zama reservoir, whose border runs beyond Block 7 and into the nearby PEMEX assignment block. Talos and PEMEX are still in discussions over unification, though these talks cannot continue until PEMEX drills a well on its block.
The Repsol discovery is positive news for the industry, having been battered by the impact of COVID-19 and caused operators around the world to strip their CAPEX for the coming years. It also proves the relatively-well protected nature of Mexico’s offshore activity and particularly deepwater developments, into which operators have already poured heavy investment. Due to the contractual obligations of these blocks, the investment they have received and the length of time development takes in such difficult environments, Mexico’s offshore arena should avoid some of the strongest cutbacks the industry will see. Shut ins and suspensions are less time consuming and costly onshore, as the US shale industry has found out to its misfortune.
This is the second major discovery story of the year in Mexico’s offshore, following Eni’s announcement of its Saasken Exploration Prospect in Block 10, in the “mid-deep water of the Cuenca Salina in the Sureste Basin.” The company, which operates the block in a 65/20/15 percent split with Lukoil and Capricorn respectively, believes the prospect may contain between 200 and 300 million boe.