Alliances needed for deepwater

A recent deep-water oil discovery in the Gulf of Mexico could be followed by similar finds, especially if Mexico begins to allow alliances with companies experienced in deepwater exploration, the head of Mexico’s state oil monopoly said March 16.

“Not to invest in deep water would not only be irresponsible, it would also mean we couldn’t maintain oil production in the medium and long term,” said Luis Ramirez, chief executive of Petroleos Mexicanos, or Pemex, at a news conference.

On March 14, President Vicente Fox announced that the exploratory “Noxal 1” well had yielded the discovery of a deepwater oil deposit that he said could exceed reserves at the offshore Cantarell deposits, Mexico’s largest oil field.

Cantarell has produced more than 11.5 billion barrels of oil since 1979, and is still expected to yield 1.9 million barrels a day this year.

Ramirez said the new area has a potential of 10 billion barrels of crude oil equivalent. He said the Noxal exploratory well has perforated 3,200 meters (10,500 feet) into the seabed at a depth of 935 meters (3,000 feet), finding gas and liquids. The well will seek crude oil at 4,000 meters (13,100 feet).

Noxal discovery called new oil province

Ramirez said Pemex will need to drill another five to seven wells to complete the delimitation of the deposits and make volume calculations, which should be done in the next two years. Only then can Noxal be considered a production project, and investment requirements estimated, he added.

Cantarell began declining this year and will decline more rapidly in subsequent years, Ramirez said. But he added that officials still expect to extract more than 8 billion barrels all together from the oil field.

In 2004, Pemex estimated a potential for reserves of up to 54 billion barrels in its Gulf region, more than half of that under deep water.

—The Associated Press