Shell To Drill in Mexico’s Ultra-Deepwater

This week, CNH gave Shell the go-ahead to drill an exploratory well in ultra-deep waters off the coasts of Veracruz and Tabasco. The drilling of Aluk-1EXP will take place within contractual area CNH-R02-L04-AP-CS-G04/2018 and is included as part of the incremental alternative scenario of the modification to the original exploration plan, already approved by CNH on February 15, 2022 under resolution CNH.02.002/2022.

Shell plan to target the Cretaceous and Jurassic layers, with drilling to take place at intervals from 3,700m to 3,875m and from 3,875m to 4,458m, respectively. Drilling will follow a vertical trajectory with a directional window at a projected depth of between 4825m and 5440m. For this purpose, the Maersk Voyager drillship, with the capacity to drill in water depths of up to 3,658m, has been contracted. The hydrocarbon Shell is seeking to retrieve from Aluk-1EXP is heavy crude oil of 12° API with a geological success probability of 18 percent, while the estimated prospective resources have been put at 105MMboe. The approved program foresees 96 days of operations: 60 for drilling, 54 for abandonment, a window of 24 days for exploration and 9 days for abandonment once more.

This latest development in Shell's Gulf of Mexico deepwater operations comes after the supermajor was forced to shut down production at three of its deepwater platforms in the American Gulf following a leak. The affected Mars, Ursa and Olympus facilities contribute a combined 410Mb/d of oil, according to data on the company's website, with Mars’ sour crude in particular being highly sought after by both US and Asian refiners. 

The leak originated at the Fourchon booster station, which helps increase the pressure and flow of crude to storage facilities in Clovelly, Louisiana. Shell issued a statement assuring that it was “coordinating with local authorities and mobilizing personnel and equipment to assess the situation," but the company did not report when the Mars and Amberjack pipelines might be back in operation.

Despite these recent mishaps, Shell remains committed to deepwater exploration in the Gulf of Mexico, even as other supermajors pull out. In February 2022, CNH approved US$270 million investment plans by the  world’s 4th largest IOC in the CS-G04 deepwater contract off the coast of Tabasco and Campeche, while Shell Mexico’s Director of Corporate Affairs, Lucia Bustamante, confirmed in May 2022 in an interview with El Sol de México that the company has a long-term vision for investment in offshore exploration and development in the country, lasting for at least the next 50 years.  

In coming years, operators with an established presence in the Gulf of Mexico such as Shell should be best-placed to benefit from infrastructure transference and transboundary reservoirs such as those found in the Perdido Fold Basin to lead deepwater development in Mexico. Determining a Deepwater FID in Mexico is just one of a wide range of panels at MOGS 2022, where the industry’s top decision-makers and analysts will meet to share ideas and expertise. Click the following link to book your place!