OTC: Technology key to Mexico's future oil production

Technology is key to unlocking Mexico's petroleum resources and enhancing production, said Mexican Petroleum Institute Chief Executive Heber Cinco Ley at the Offshore Technology Conference in Houston May 5.

May 6, 2008

2 min read

Uchenna Izundu
International Editor

HOUSTON, May 6 -- Technology is key to unlocking Mexico's petroleum resources and enhancing production, said Mexican Petroleum Institute Chief Executive Heber Cinco Ley at the Offshore Technology Conference in Houston May 5.

With subsalt plays and poor recovery efficiency for existing fields, Mexico needs improved oil recovery and innovative technology to help extend the productive life of its reservoirs, Ley stressed. Operators are finding Mexico's fractured reservoirs challenging because they are difficult to characterize, model, and simulate. "We need a new generation of reservoir simulators," he said.

The country's oil and natural gas industry is crucial to its economy, accounting for 40% of Mexico's federal budget. But production is on the wane: oil output is 3.1 million b/d, and gas is 6 bcfd. Cantarell, Mexico's largest oil field, generates half of the output of state-owned oil company Petroleos Mexicanos (Pemex). Cantarell had been producing an average of 1.58 million b/d, but production began falling last November to 1.3 million b/d, and it is expected to drop to 600,000 b/d by 2013.

Ley said the challenge with Cantarell is accessing oil that is trapped under the gas cap.

Onshore Chicontepec field will require $14.5 billion to develop. Pemex expects to drill 5,421 development wells in the field by 2012. Oil production is expected to hit 1 million b/d. However, according to Ley, Chicontepec has a primary recovery factor of only 5-7%.

Deep water will be the future source of oil production in Mexico, but expertise is needed in flow assurance, control pipelines, subsea systems, and other areas, Ley added.

Pemex has assembled its first deepwater asset team for the Coatzacoalcos Profundo area, which Pemex hopes will produce 400 MMcfd of gas under a $40-70 billion investment program. The main fields are Noxal, Lakach, Lalai, and Nab.

Pemex also has contracted three semisubmersible drilling rigs for deepwater activity. Two of the rigs can drill in water as deep as 2,100 m, and the third can work in water 3,000 m deep.

Water management from producing reservoirs is another major challenge, as it takes 3 bbl of water to produce each barrel of oil, Ley added. "We need to predict this accurately, as it can affect hydrocarbon production. We need to develop efficient drilling at lower costs."

Contact Uchenna Izundu at [email protected].