Pemex sets the course for Mexican drilling

Feb. 2, 2004
Pemex sets the course for Mexican drilling Great interest among international companies is driving increased activity in Mexico's on and offshore basins.

Great interest among international companies is driving increased activity in Mexico's on and offshore basins.

Mexican state oil company Petróleos Mexicanos will increase spending by only 9% this year, to $9.5 billion, funded in part by new debt issues on capital markets.

Although this is the largest budget among state-owned companies, the increase is much less than others, such as Venezuela's PDVSA, which plans to increase spending by 129% in 2004, to about $6 billion.

Pemex Exploración y Producción (PEP) has scheduled to release bid tenders for construction of 37 offshore platforms in the Gulf of Mexico in 2003-04, including 17 in the Ku-Maloob-Zaap (KMZ) fields complex, Campeche; 18 in South West; and 2 for the Lankahuasa shallow water area off Vera Cruz.

Campeche offshore

In mid-January, Pemex awarded a contract to a subsidiary of Houston-based Jacobs Engineering Group Inc. to act as owner's engineer for the KMZ platform project.

The $2.5 billion project is planned to run through 2010, calling for 82 offshore wells (including 4 for nitrogen injection), and the construction of 18 platforms and 32 pipelines.

Contracts for six drilling platforms (PP-KU-C, Manik-A, PP-Maloob-A/B, MAY-A/B) and one link platform (KU-A2) in the KMZ have already been awarded.

Bosnor SA de CV was selected in October 2003 from the field of 18 bidders to construct the PP-KU-C platform for $37 million.

Guadalajara-based Swecomex SA de CV was selected in September 2003 from among 14 bidders to construct the Manik-A platform for $33.5 million.

Swecomex was also selected in September from among 19 bidders to construct the PP-Maloob-A/B drilling platforms for $80.5 million.

ICA Fluor Daniel,a joint venture between Mexico's largest construction company, ICA, and US-based Fluor Corp., was selected in July 2003 from among 19 bidders to construct the MAY-A/B drilling platforms for $55 million.

Construcciones Mecánicas de Monclova (COMMSA) was selected in August 2003 from among 18 bidders to construct the KU-A2 link platform for $48 million.

Pemex announced in late November that it would explore new deepwater areas in Campeche.

In early January, Pemex called for bids on a group of engineering, procurement, and construction (EPC) contracts to manufacture three platforms to produce heavy crude from KMZ: the PB-KU-M; PB-KU-S; and PB-KU-A2 production platforms.

There were nine registered bidders for the PB-KU-M platform as of Jan. 12: Indústria del Hierro (ICA); J Ray McDermott; Evya; Swecomex; ABB Mexico; Construcciones y Equipos Latinoamericanos (PROTEXA); IZAR Construcciones Navales; Kiewit Offshore Services; and Odebrecht Oil & Gas Mexico. Bids are due Apr. 23.

There were eight registered bidders for the PB-KU-S and the PB-KU-A2 production platforms as of Jan. 12: Representaciones y Distribuciones Evya SA de CV; Swecomex; ABB Mexico; PROTEXA; J Ray McDermott; Kiewit; Odebrecht; and Grupo Mexicano de Desarrollo (GMD).

Bids for the PB-KU-S are due May 14 and offers will be disclosed on May 28, 2004. Bids for the PB-KU-A2 are due May 31.

Bidding is open until Jan. 30, 2004, for the SINAN-A/B eight-legged platforms. As of Jan. 9, there were already 14 bidders registered. Offers will be disclosed on Feb. 11.

The contract decision for the SINAN-C/D was still pending on Jan. 12. The offers by 21 bidders were disclosed on Dec. 12, 2003.

Contracts for six drilling platforms (PP-KU-C, Manik-A, PP-Maloob-A/B, MAY-A/B) and one link platform (KU-A2) have already been awarded.

Bosner was selected in October 2003 from the field of 18 bidders to construct the PP-KU-C platform for $37 million.

Swecomex was selected in September 2003 from among 14 bidders to construct the Manik-A platform for $33.5 million.

Swecomex was also selected in September from among 19 bidders to construct the PP-Maloob-A/B drilling platforms for $80.5 million.

Pemex seeks to raise heavy Maya crude output at KMZ to 800,000 b/d by 2011. KMZ is adjacent to the Cantarell megaproject, the world's largest oil field development project (OGJ, Feb. 11, 2002, p. 22).

A new jackup, the Central Tonala, is almost finished at Keppel's AmFELS Inc. shipyard in Brownsville, Tex.

Perforadora Central SA de CV's Francisco Lopez told OGJ that the rig would probably be delivered in February and immediately drill three wells in Campeche Bay for Pemex.

Tabasco Littoral

Pemex also has bidding rules available (registration deadline Feb. 22, 2004) for the engineering and construction of Yaxche-A ("Tree of Life," in Mayan) platform. This eight-legged drilling platform will be off Tabasco state.

The first bidders' meeting was scheduled for Jan. 26; bids are due Feb. 27, and offers will be disclosed on Mar. 8, 2004.

As with other Pemex bidding, the selection basis is the lowest price bid from compliant proposals. There were two registered bidders as of Jan. 12:.Evya, and PROTEXA.

Veracruz onshore

Pemex is about to finalize a 2-year contract for drilling and well completion integral services onshore Veracruz. Bids were due Jan. 20.

As of Jan. 9, there were seven bidders: Halliburton de Mexico SA de CV (unit of Halliburton Co.); Dowell Schlumberger de Mexico SA de CV; Perforaciones Industriales Termicas SA (Pitsa, Mex.); PD Oilfield Services Mexicana (subsidiary of Calgary-based Precision Drilling International); Industrial Perforadora de Campeche SA de CV (IPC); BJ Services Company Mexicana SA de CV; and ICA Fluor Daniel.

Pemex and the Bureau of Economic Geology at the University of Texas at Austin completed a basin analysis and play characterization study of Pliocene and Miocene gas plays in the Veracruz and Macuspana basins.

They examined hundreds of wells drilled over 60 years and found that drilling muds of heavier than 17 ppg were typically used in the overpressured shale sections.

Pemex E&P's Efraín Méndez-Hernández said that amplitude anomalies were responsible for more than 85% of drilling successes in the Veracruz basin "and have been key to the discovery of many new fields."1

Precision Drilling has been engaged in controlled pressure drilling (CPD) in Veracruz, Villahermosa, and Burgos, using its Hostile Environment Logging MWD system.

Burgos basin

The Burgos basin produces 1 bcfd of natural gas, representing about 25% of Mexico's domestic production.

Pemex studies suggest 2.1 tcf in proven reserves and 1.2 tcf in probable reserves.

Pemex signed a 15-year contract in December 2003 for exploration in the Fronterizo area of Cuenca de Burgos, including parts of Tamaulipas, Coahuila, and Nuevo León states. The $265 million contract was arranged with a consortium including Petróleo Brasileiro SA (Petrobras), Teikoku Oil Co. of Japan, and the Mexican firm D&S Petroleum (a Diavaz Group subsidiary), and calls for more than 100 wells to be drilled.

Fronterizo (371 sq km) is the fourth of seven blocks within the Burgos to be assigned in a multiple services contract (MSC; OGJ, Dec. 8, 2003, p. 26). The total area covers 12,500 sq km.

Reynosa-Monterrey is the largest block (2,332 sq km) and was the first awarded, on Oct. 16, 2003, to Spanish oil company Repsol-YPF SA. Repsol is planning a capital investment of $2.43 billion.

The company started seismic acquisition in early January and plans to follow with eight development wells.

José Hiram Suárez, director of projects of the Economy Secretariat in Tamaulipas, said that Tamaulipas would receive $3 billion over the next 3 years through MSCs. He said this suggests that each day a new well will be drilled.

The Cuervito block was the second Burgos MSC, awarded to a Brazilian-Mexican-Japanese consortium in October for $260 million.

Gero Farruggio, regional service manager for Latin America at UK-based Wood Mackenzie had warned that "Cuervito [231 sq km] is likely to attract a much lower level of investment given it's a fraction of the size of Reynosa-Monterrey."

The Misión block (1,972 sq km) was the third Burgos MSC awarded for $1.04 billion. Misión consists of 21 separate gas fields in the states of Nuevo León and Tamaulipas.

The bidding consortium included Argentine company Tecpetrol and Mexican company Industrial Perforadora de Campeche (IPC).

Tecpetrol is a wholly owned subsidiary of the Techint Group. IPC is a subsidiary of the Mexican conglomerate Grupo "R."

There were no bids for the Corindon-Pandura and Ricos blocks during the 2003 bidding rounds, and the bidding deadline for the Olmos block was extended to Jan. 14, 2004.

Bids for vertical and directional drilling works in the onshore Burgos basin and North region were due to Pemex on Jan. 12.

There were five registered bidders as of Jan. 9: Dowell Schlumberger de México; Alianzas Perfolat; Halliburton de México; PD Oilfield Services Mexicana; and Houston-based ReedHycalog, a unit of Grant Prideco Inc.

Drilling continues elsewhere in the Burgos with four rigs owned by Drillers Technology de México SA de CV, a joint venture between Drillers Technology Corp. (51%) and Dowell Schlumberger de México (49%), and subcontracted by the JV to Schlumberger.

According to a news release late last year, the rigs are operating at 85% utilization in the Burgos basin, under day work contracts, drilling vertical and directional wells to 2,300 m.

Chicontepec

Dowell Schlumberger, as lead contractor to Pemex, is drilling about 200 wells in the first stage of the 4-year Chicontepec drilling program that began May 2003 and ends December 2006.

Chicontepec is in the Tampico-Misantla basin of east central Mxico, about 250 km northeast of Mexico City, in Veracruz, Puebla, and Hidalgo states. The vertical and directional wells range from 2,000 to 2,800 m TD, targeting production from turbidite deposits in paleochannels with low permeability (0.01 to 100 md).

Production in Chicontepec began in 1952, but fewer than 1,000 wells were drilled, and output has been limited by geologic complexity.

Three new top-drive casing drilling rigs were constructed in Canada for the Drillers Technology joint venture and delivered in second quarter 2003 to Chicontepec.

These rigs are skidded between locations. The rigs have operated at 100% utilization, according to Drillers Technology Corp. They are pad drilling, with up to 18 wells started at each site. The new rigs have reduced drilling times to 8-10 days from Pemex's target of 21 days.

The Chicontepec contract, held by Schlumberger Oilfield Services and ICA Fluor Daniel, is worth $500 million, the largest integrated services contract awarded in Mexico at that time but since superseded by the Burgos MSCs (OGJ, Mar. 31, 2003, p. 8).

In May 2003, Pemex director Raul Munoz said that it could require an investment of $30 billion over a period of 15 years fully to develop Chicontepec, and the project would require drilling 13,500 wells.

Reference

1. Méndez-Hernández, Efraín, "A brief history and recent advances in seismic technology for the petroleum industry in Mexico," The Leading Edge, pp. 1,116-1,118 (November 2003).