Sergio Limardo
Director General
Repsol Exploración México
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View from the Top

In Search of the Oil Grail

Wed, 01/22/2020 - 06:47

Q: When is Repsol expected to start exploratory drilling at its awarded blocks?

A: We submitted 11 proposals in Rounds 2.1, 2.4 and 3.1, of which six were winners. The six blocks that we operate are a great commitment which includes two exploratory wells each in Block 10, located in Cordilleras Mexicanas, between Tampico and Veracruz, and Block 29, located in the Salina Basin, between Veracruz and Tabasco. In the other four blocks, we will continue evaluating the geological and geophysical information, which allows us to mature the prospects that may exist in the blocks and thus make the decision of where and when to drill exploratory wells. Our forecast is to start drilling two wells in 2Q20. 

We are in the exploration process, which makes it difficult to predict what will happen. If our projections are met, Mexico could become a significant subsidiary within Repsol’s global portfolio. We are in Mexico because it has an important oil tradition and proven reserves. We believe Mexico will provide Repsol with significant results. 

Q: What is Repsol’s role in Mexico’s deepwaters and what are its expectations regarding the government’s deepwater production goal?

A: Deepwater blocks were awarded in Rounds 1.4 and 2.4. Of all the wells, we estimate 30 percent will be successful. Of that 30 percent only a few will reach production. We believe that the rounds are necessary to achieve the production projected by the government, since the chances of success in deepwater are limited.

The blocks in which we are working are between 450m and 1,200m deep. They are located about 80km off the coast. Drilling a well in these conditions takes a lot of time, since it is necessary to take into account basic issues such as logistics, which complicate the project's development. According to our own experience, it takes between seven and eight years for a discovery in deepwaters to become operational. We are already working at our Mexican and international offices around the world to start drilling operations in March 2020. We are waiting for CNH’s approval of the deepwater blocks and are preparing all the services required by this activity, such as logistics, purchase of supplies and infrastructure construction. In addition, we are conducting geoscience work in the rest of the blocks. 

Q: How have shallow-water activities advanced?

A: Block 11 in shallow waters of Round 2.1 was the first contract we won. CNH approved our exploration plan in September 2018 and we have been working on the reprocessing of seismic. The situation of Blocks 5 and 12 from Round 3.1 is similar to those we obtained in Round 2.4. Exploration plans are in the hands of CNH and are within the guidelines, so we think they should be approved in July 2019. These blocks have no obligation to drill, although we are conducting geoscience studies to evaluate them and try to establish our plans for the future. 

Q: What are Repsol’s plans to attract, retain and train its workforce in Mexico?

A: Mexico has an important oil tradition, with the nuance that it has only had one operator until a few years ago. However, right now we are in the middle of exploration, which we carry out with our own people who come from different subsidiaries of the company throughout the world. This is the initial team, but Repsol’s desire is to attract local talent that adapts to Repsol’s way of working. 

Our commitment is to bet on technology transfer through knowledge. We believe that one of the best ways to achieve this is through educational institutions that allow us to collaborate with the training of national human resources. It is vital that there are engineers who can respond to the industry’s demand for talent in the coming years. For this reason, Repsol signed a collaboration agreement with UNAM. 

 

Repsol is an energy company based in Madrid, Spain. It focuses on upstream and downstream activities throughout the world. It is vertically integrated and operates in all areas of the oil and gas industry.