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The Mexican hydrocarbons commission (CNH) approved a spate of oil operations on Wednesday that included a pair of costly offshore plans by the countrys state-owned firm Pemex and global oil giant Shell.
Shell put forth an ambitious plan for an exploratory well - Chibu-1EXP- in ultra-deep waters, located in the CNH-RO2-LO4-AP-CS-GO1/2018 assignment that the firm acquired in Round 2.4.
Shell will target the well at a water strap of 2,760m.
Drilling will be complicated by navigating two different geological formations. Its primary objective lies in the Oligocene stratum, at a depth of 3,714m. Shell estimates 143Mboe in potential reserves and placing the geological success probability at 26%.
The secondary objective is yet deeper, at the Late Jurassic site with depths of 6,110m. There Shell estimates to find 76Mboe, with a geological success probability of 13%.
Combined, Shell’s seismic surveys of the area suggest a potential 219Mboe of 28° API oil.
Beyond the sheer size of the site - representing about 3% of Mexico’s proven oil reserves - the investment signals willingness to invest where Mexico’s oil sector needs it the most, in deep offshore waters.
“This well is very good news,” said CNH commissioner Héctor Moreira, “because it implies that were now entering in deep water.”
Given the depths, Shell expects more than US$93mn in layouts on Chibu-1, a large sum for a single exploratory well.
Shell will begin to drill Chibu-1 on December 5, relying on a platform ship it owns, the Deepwater Thalassa. According to the plan, the company will finalize exploration on February 21 and cement the well by March 1, 2020.
PEMEX OFFSHORE PLANS AT KUIL
CNH also approved an extensive plan by Pemex Exploración y Producción (PEP) for a range of activities at the Kuil field, which is part of the assignment A-0184-M-Campo Kuil.
Kuil hosts five active wells, with one well temporarily blocked, spread out across three principal zones in a 34km2 area. The volatile grade oil from the Kuil site ranges from 33-36° API. It lies 29m below the surface.
In the near term, PEP expects to drill wells, install pipelines and undertake other construction work, carry out one major repair at a well in the northern zone of the area, and conduct a blockage.
Of the US$463mn PEP will spend at Kuil, the largest expenditure (over US$140mn) will be for dismantling installations as it winds down production at the site.
While the approved work will begin this year, PEP will continue development of Kuil, with a peak of activity coming in 2027-2028 as PEP transitions toward blockages and abandonment. It will terminate work at the area in 2030.
The Kuil field lies off the waters of the Campeche and Tabasco states, roughly 117km northeast of the Dos Bocas maritime terminal.
The area’s waters have seen a rising number of pirate raids on oil rigs over the past year, a threat which the government is countering with active navy patrols.
CNH GROWS
For most of this year, the 7-seat CNH has functioned with only four commissioners, which is the minimum for a quorum.
Wednesdays extraordinary session saw the number increased to five as the senate recently approved Rogelio Hernández Cázares as president of CNH.
Bringing the CNH board to full strength will likely take some time since the two current candidates to occupy the available seats do not count on sufficient votes in the senate. |
