Cantarell megaproject logs milestones

In a major step toward securing financing for Mexico's keystone upstream project, expanded development of the Cantarell oil field complex in the Bay of Campeche, Japan's Export-Import Bank has approved a $1 billion dollar untied loan to Mexico's state petroleum company Petroleos Mexicanos.

July 6, 1998

3 min read

Meanwhile, Pemex has let contract to a partnership of Corp. Mexicana de Mantenimiento Integral SA de CV (a joint venture of Halliburton Co. unit Brown & Root Energy Services and Mexico's Grupo R) and Bufete Industrial to design, build, install, and hook up three major offshore platforms as part of the Cantarell project.

Loan details

Repayment for the Ex-Im Bank loan, to begin 8.5 years following the disbursment, is expected by Pemex to be easily covered by the cash flow generated by increased oil production at Cantarell.

Because Mexico's public spending has been slashed because of the plunge in world oil prices, Pemex's investment budget has been severely cut this year. The Japanese loan will help ensure the budget cuts do not hold back the further development of Cantarell fields, which the Mexican government considers a strategic priority.

The Cantarell development project, which includes a nitrogen injection program to maintain reservoir pressure, is estimated to cost about $5 billion. Pemex has divided it into 37 engineering, procurement, and construction contracts and 27 principal purchase orders, involving the laying of 400 km of pipelines and the construction of 28 offshore platforms. Nitrogen will be purchased from a privately owned plant on the Mexican coast, to be built by an international consortium of six companies by 2000.

Contract

Under the contract Pemex awarded last week, one of the platforms will be a producing platform with capability for natural gas treating, while the other two will be for natural gas compression.

According to Brown & Root project official Manuel Palomo, Pemex has called for the gas compression platforms to process Cantarell natural gas production. He said Pemex may decide to reinject the natural gas into the field, or ship it to shore for use as fuel.

Platform fabrication work is to begin in 3 weeks. The production platform is expected to begin operation in July or August 2000, while the two gas compression platforms are to begin operating in October 2000.

Brown & Root will provide overall project management services, while engineering design will be done by Brown & Root and Bufete Industrial. The platform construction will take place at different locations on the U.S. Gulf Coast and the yards of Bufete and Grupo R in Mexico.

The Cantarell complex, which contains the three major producing fields of Akal, Nohoch and Chac, has produced an average of 1 million b/d over its 19-year history and currently produces 1.32 million b/d. Pemex estimates the field has proven and probable reserves of 13.5 billion boe.