Mexico's state oil company Pemex has stopped drilling Valeriana 1, a high-temperature high-pressure appraisal well located in the state of Tabasco, after new interpretation of seismic studies led to a drastic modification in the design of the wells, the National Hydrocarbons Commission said Aug. 12.
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Valeriana was originally discovered in 2017, but the well gained new importance in the administration of President Andres Manuel Lopez Obrador as he has committed to stop the decline in crude production by focusing on proven onshore and shallow-water deposits. In March, the president announced a discovery very near Valeriana and renamed the complete area General Francisco J. Mugica. The complex is believed to hold as much as 1.2 billion barrels of oil equivalent. By 2023, Pemex plans to drill over 60 wells in the complex.
Pemex had planned to drill four more exploration wells at the site, a plan that will also likely be modified, said CNH commissioner Alma America Porres Luna, during a meeting. The work plan for the site was approved in March 2019 and modified several times.
Valeriana is one of the 20 areas Pemex has identified as a priority to stop the decline of its main production complex Ku-Maloob-Zaap, or KMZ.
Maloob, Zaap, Ayatsil, and Xanab, are responsible for roughly 50% of the total production at the state company, CNH data shows. The company has a total of 209 fields, the data shows.
KMZ production peaked in 2013 at 855,000 b/d and declined to 694,000 b/d in 2020, according to S&P Global Platts Analytics. The decline rate averaged about 2.0%, with the worst of those years being 2020 at 8.1%. Platts Analytics expects the decline to continue in 2021 to 667,000 b/d.
In contrast, based on companies' existing plans, production by independent producers is expected to increase to 280,000 b/d by 2024, when this administration ends, and to over 400,000 at its peak in 2028.
Platts Analytics expects private production to help state oil company Pemex reach a production of 1.83 million b/d in 2022. Declines in Pemex fields will drag production, until two more operators, Talos Energy and BHP, begin production, in 2025, lifting output again, Platts Analytics data shows.
Tecpetrol to drill onshore exploration well
During the Aug. 12 meeting, CNH approved requests from Argentina's Tecpetrol to drill Forcado 101, an exploration well in the Northern state of Nuevo Leon.
Tecpetrol, through its Mexico subsidiary Servicios Multiples de Burgos, will spend $4.6 million drilling Forcado, where the company has identified 11 million boe in prospective resources.
Forcado is located near the border of Tecpetrol's block, which is surrounded by blocks operated by Pemex. If the company strikes oil, the reservoir is likely to extend into one of Pemex blocks, and could be subject to unitization, CNH said.