Time for a Deepwater Oil Discovery?

Although predicating his comment with the statement that it is always important for an operator to discover hydrocarbons, whether oil or gas, Gustavo Hernández García, Subdirector of Planning and Evaluation at Pemex E&P, admits that oil is far more lucrative for Pemex than gas. This is especially true in deepwater, where the cost of exploration and development is much higher than in shallow water or onshore. Whereas a deepwater gas discovery can be developed profitably if reserves are large and production rates are high enough, it is much more profitable to focus resources on oil fields, which oer a much higher margin.

Pemex is confident that 2012 will yield oil discoveries in deepwater, as Hernández García explains: “We have made many non-associated gas discoveries in recent years, but we are very optimistic about the scheduled wells that we have to drill this year, and the possibility of producing oil from them. We are expecting to find oil in the reservoirs located in both southern and northern deepwater areas of the Gulf of Mexico. We still need to drill and then complete the proper studies, and we won’t make a big discovery with just one well. However, the Caxa-1 well, located in the southern part of the Gulf of Mexico, is a deepwater well to be drilled this year where we expect to find oil.”

After completing Caxa-1 by July or August of 2012, Pemex expects to move to the Trión well in the Perdido folded belt, where Pemex also expects to find oil based on preliminary exploration results. The NOC will start drilling the Supremus-1 well during April 2012, also in the Perdido belt, the location where Hernández García says Pemex feels it has the greatest chance of striking deepwater oil deposits. Supremus-1 should be completed within four to five months, according to the NOC’s estimates, which means that the company expects to announce a significant oil find in deepwater before the end of the year.