Chicontepec Formation
The Chicontepec Basin is a petroleum system in Mexico located north-east of Mexico City, covering an area of around 3,800 km² in the states of Veracruz, Puebla and Hidalgo. Several oil fields have been discovered in that area since 1926. A major field was discovered in 1973 but contains extra heavy crude, which due to special refining needs is considered unviable at this time. Since that time, tiny amounts of oil have been produced[1]. While the reserves are overwhelmingly very heavy crude, pockets of lighter oil, as well as natural gas, are also found in the basin[2].
Overview
Chicontepec Basin contains Mexico's largest, certified hydrocarbon reserve, totaling more than 19Bboe with original oil in place of over 139Bboe; recovery is complicated by challenging, low recovery rate reservoirs, but is made more attractive due to the presence of light and super-light crude oil. [6]. In 2003, PEMEX said it could take total investment of $30 billion over 15 years to fully develop Mexico's oil and gas reserves in the Chicontepec Basin. The project would require drilling 13,500 wells in the basin, much more than the total number of oil wells now producing in the country [3]. This situation is interesting as the oil wells would be numerous and small. It would be necessary to get permission to drill from the communities that these wells would be in. Fortunes might be made by private firms in the pre-exploratory negotiating phase.
In addition to being economically and technically challenging, the basin's development also faces political difficulty, because the areas overlapping it are quite densely populated[4], including by Native Americans like the Otomi tribe. Despite these difficulties, Pemex urgently needs production from Chicontepec to offset the rapid production decline in its main offshore field, Cantarell. In February 2009, DeGolyer and MacNaughton certified that the Chicontepec Field had reserves comparable with half of those in Saudi Arabia with 139 billion, which puts Mexico at the third place of the countries with most oil reserves after Arabia and Canada, yet, Mexico lacks the technology to exploit those reserves.[5]
Attempts at increasing output
In March 2006, Mexican President Vicente Fox announced that Pemex would be investing $37.5 billion US dollars over the next 20 years on the oil fields of Chicontepec. It is hoped that this will boost the fields' output to 1 million barrels per day. Pemex's chief executive estimates that 20,000 wells are to be drilled in order to exploit this field.
Mexico needs this new output as production in the country's main field, Cantarell, has fallen dramatically since in 2004 peak[6]. Cantarell's main reservoir, Akal Nohoch, hit 2.2 million barrels a day in December 2003 and is down to 450 thousands in December 2009[7].
Intensive drilling has taken place in Chicontepec recently in recent years, starting with a contract for 500 new wells offered in December 2008 [8]. However, results in terms of output have been disappointing, with the field still yielding a modest 30 000 barrels a day in December 2009 [9].
See also
References
- ^ About 2500 b/d in 2002 according to [1]
- ^ World oil, Nov. 2001 Vol. 222 No 11
- ^ Sergio Solache, 17 February 2007, Arizona Republic, claims that "Pemex now has more than 5,000 wells in production"
- ^ Gov´t strives to save oil field - El Universal - Mexico News
- ^ http://www.eluniversal.com.mx/notas/577412.html
- ^ Mexico’s Kessel Is ‘Evaluating’ $11.1 Billion Chicontepec Field, Bloomberg, sept 2009[2]
- ^ Official Mexican figures, available here [3]
- ^ Mexico seeks bids for 500 Chicontepec oil wells [4]
- ^ UPDATE 3-Mexico crude output slide slows in 2009, Reuters, Jan 2010, middle of the article [5]