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The AAPG/Datapages Combined Publications Database
Houston Geological Society Bulletin
Abstract
Abstract: First Round Mature Fields, Mexico
Overview of the Blocks: Opportunities, Upsides and
Downsides
Early in 2011 Petroleos Mexicanos (PEMEX)
plans to contract out the redevelopment of
mature and abandoned fields in three separate
blocks onshore in the southern state of Tabasco,
under a recently approved performance-incentive
scheme. This executive summary provides the
technical opportunities, upsides, and downsides
for each block
as well as the main contract terms,
so that small companies with specific experience
or niche technologies can ascertain their interest
in evaluating data packages and competing in the
upcoming first round.
The Magallanes Block
presently produces 6,833
bopd and 13.6 mmcfgpd from 54 wells. The
opportunity in the very mature 63-year-old
Sanchez Magallanes Field is to redevelop 86.5
mmboe of probable and possible remaining
reserves of 31° to 34° API gravity oil and associated
gas. PEMEX has had this offering certified based
on 2005 vintage 3D seismic in a complex of multiple
Upper Tertiary fair to good quality reservoir
sands and fault blocks lying at depths of -2,000 to
-3,500 m both above and flanking a salt intrusion.
The upside is finding deeper exploration prospects
(turtles, sub-salt), infill drilling locations, and recompletion
intervals by reprocessing the seismic data and conducting
detailed fault trap analyses. The downsides are incomplete
acquisition coverage in the 3D seismic survey, and wells that have
sanding-up and paraffin problems. Much of the field has been
water-flooded. The other field in the
block
, Otates, has very little
remaining identified undeveloped reserves in a few remnant fault
traps overlying a small adjacent salt intrusion and may need to
be relinquished after re-evaluation. Moreover, the study and
surveillance of at least 160 separate pools in Sanchez Magallanes
will be a challenge to manage efficiently as it will likely tie up
considerable staff time.
The Santuario Block
presently produces 6,742 bopd and 3.81
mmcfgpd from 34 wells. The opportunity is to take over from
PEMEX the development of 44.5 mmboe of proven remaining
reserves of 35° to 36° API gravity oil and associated gas that
PEMEX has already identified based on 3D seismic in multiple
Upper Tertiary good to fair quality sands lying at -2,950 to - 3,600 m
in two 43- and 47-year-old fields (El Golpe and Santuario)
formed by fault traps on the crest of a major roll-over anticline.
The upside is in covering two small parts of the block
with
mini-3D seismic surveys (17 km2 and 10 km2) to reveal more
recompletions and infill drilling locations. The downside is that a
third field in the
block
, Caracolillo, is abandoned, has no
identified remaining reserves, and may need to be relinquished
after re-evaluation.
The opportunity in the Carrizo Block
is to redevelop 51 mmboe
of remaining possible reserves of oil and associated gas in
the abandoned Carrizo Field, a shallow, faulted gentle anticline
abandoned due to lack of funds. It is unclear how much of these
reserves are heavy oil (18° to 22° API gravity) in Upper Tertiary
sands lying at -1,400 to -2200 m and how much is extra heavy oil
(7° to 12° API gravity) in shallower sands of excellent quality
overlying the field. The upside is in covering the unsurveyed 40%
part of the field with a mini-3D seismic survey to identify more
recompletions and infill drilling locations. In addition, an
enhanced thermal recovery project could be installed to exploit
the shallow extra-heavy oil.
The contracts on all three blocks offer the opportunity to be paid for services on the basis of performance factors, including production of oil and gas in excess of a pre-established decline curve, cost reduction, accident prevention and value added. Payment will be in cash on an inflation adjusted fee-per-barrel basis (the biddable item). The upsides include 21% of the fee-per-barrel for existing production, a two-year evaluation phase (followed by total or partial relinquishment), a possibility to expand the area, and an additional service fee and cost recovery for new-build infrastructure. The downsides are that reserves cannot be booked, the payments are limited by the net cash flow of the project and capped indexed to oil price, only 75% of costs can be recovered (but can be rolled over into the next period), a mandate of minimum 40% national content, and putting aside funds for abandonment needs. There is a potential conflict of interest in that PEMEX, with only a 10% working interest, has to approve the operator’s annual budget and work program. Also, an extensive environmental baseline study will be required and many of the surface facilities are old and cannot be expected to last the 25-year term of the contract without extensive maintenance. Red flags are the community risk (PEMEX operations have suffered from demonstrations and shutdowns from farmers and fishermen in the past) and the security risk (PEMEX staff have suffered kidnappings recently).