Technology-Information Relationship EssentialThu, 05/17/2018 - 09:41
Q: How would you assess PEMEX’s progress on its assigned fields after it failed to meet some exploration commitments?
A: Based on PEMEX technical, operational, and financial capabilities the Ministry of Energy awarded it with 83 percent of the country’s 2P oil reserves distributed mostly in shallow waters and onshore; and few deepwater blocks where it had exploration activities, such as the Perdido area.
These blocks were awarded for an initial three-year exploration period, with CNH reviewing PEMEX’s progress on an annual basis. During last year’s review, PEMEX had a delay in its commitments. Several reasons for not reaching its exploration targets can be mentioned, ranging from the shortfall in the committed exploration budget, focalization of investment on the most onerous wells, leaving some blocks unattended and delay on the regulation guidelines.
Even though the delay, the Ministry of Energy gave PEMEX the two-year extension to come up with the exploration plan. This extension implied a shift in PEMEX’s strategy to achieve at least one discovery per assignation. This goal seems difficult to reach; however, during 2017 PEMEX had a 50 percent exploration success rate. Given this success, we are confident that the NOC’s goals will be meet. For the 2018/19 term, PEMEX will conduct exploration activities at 130 wells and we are confident that PEMEX´s production will increase.
Q: How significant is the development of new technologies to secure a sustainable industry?
A: Information is power, and the use of technology to get information is essential. The Energy Reform has allowed us to acquire more in-depth knowledge and to exponentially expand our understanding of Mexico’s geology. For instance, using new exploratory technology allowed us to shed new light over some areas thought to be wellknown in terms of their resource volume and production potential. Be it reprocesses or new data, the conferred comprehensive visibility over our geology is comparable to new discoveries as some areas that were considered near depletion showcased a longer production lifespan. In addition, technology has helped us by reducing uncertainty with new interpretations on possible new deepwater and shallow water wells. A comparable situation is occurring in mature fields where high-tech have developed costefficient solutions.
Q: What is your assessment of the industry’s development based on CNH’s evaluations?
A: The industry is on schedule and moving at the right pace. It is crucial to provide PEMEX and private operators with the right timing to come up with results. Be it upstream, downstream or midstream, each sector is different and works under its specific time frame to develop successfully. Properly monitoring their growth will be critical. We also must make sure that best practices are being adopted. For instance, the Zama field has presented significant opportunities, and this could have pushed market players to rush and exploit its benefits, but the operators are moving prudently, assessing the field’s marketability and how to expand its contractual capacity beforehand, armed with a thoroughly and carefully outlined development plan. This strategy helped ENI and Hokchi Energy to double the expected initially reservoir size. Due diligence is being conducted before moving to production. This is what will give us the maximum production value and developmental sustainability from all our wells and fields. PEMEX should follow suit to obtain comparable results by distancing itself from a long-standing tradition of hastily attaining production phase without taking the time to comprehensively assess a particular oil field’s potential. The name of the game is oil field optimal management and CNH is working toward providing the regulatory framework and the development time frames to attain it. The success of the industry calls for maximizing the value of each of the country’s oil fields with an efficient and effective lifespan.