Pemex changes exploration strategy to pursue shale

Mexico's state-owned Pemex changed its exploration strategy for acreage in the Tampico-Misantla basin to search for shale resources.

Pemex will invest up to $437mn in drilling up to 32 wells, including 12 wells in unconventional resources in its 787km² (304 mile²) acreage in Veracruz, according to the modified exploration plan that oil regulator CNH approved yesterday.

President Andres Manuel Lopez Obrador has ruled out the pursuit of shale resources through hydraulic fracturing but Pemex said it included the new prospects in the event that policy may change.

Pemex stopped submitting shale exploration plans for approval last year following the president's objection to a series of plans submitted in January 2019.

Mexico's new five-year exploration and production plan, published in October, does not include shale resources in line with current policy despite recognizing its "big potential."

Mexico's proven and probable crude and natural gas reserves have declined each year since 2001 — apart from an uptick in 2011 — but despite that, 63pc of prospective natural gas resources and 53pc of prospective crude resources lie in unconventional formations.

Meanwhile, CNH also approved Mexican company Diavaz's $1.1bn modified production plan through 2048 for the onshore Ebano block in the Veracruz basin.

DS Servicios Petroleros — a joint venture between Diavaz DEP and Chinese company Sinopec International Petroleum Service — increased activity across the block, drilling 360 wells instead of 228 and carrying out 1,753 minor well repairs and new infrastructure.

The operator hopes to recover 88.7mn bl of crude and 33.6 Bcf of natural gas over the life of the plan, rather than the 64.4mn bl of crude and 11.3 Bcf of natural gas originally forecast.

The 1,569km² Ebano block was migrated to a production-sharing contract in March 2018 under which DS Servicios Petroleros, as operator, holds 55pc and Pemex holds 45pc.

Finally, PC Carigali Mexico Operations — the Mexican subsidiary of Malaysia's Petronas — will push ahead with its $50.5mn work plan for its shallow-water A6 block in the Salina basin, according to the 2021 exploration plan approved by CNH yesterday.

The operator plans to carry out geophysical and geological studies as well as pre-well drilling planning.

PC Carigali won the 559km² block in the second round of upstream auctions held following the 2014 energy reform.

By Rebecca Conan