Comalcalco well modification indicates trouble at Pemex

Hydrocarbons regulator CNH approved a Pemex Exploración y Producción (PEP) plan modification for an exploratory well drilled in Mexico’s onshore Comalcalco field.

Yet, a lack of specifics about expected losses of both oil and money reinforced doubts about Pemex’s operations.

In March, PEP began drilling the Racemosa-1EXP well in the field, part of Pemex’s AE-0142-Comalcalco assignment, in a ‘J’ trajectory. But PEP modified its plan to an ‘S’ trajectory, targeting the well at a final depth of 6,451m. 

Source: CNH

“The change was based on interpretation of seismic data,” CNH technical adviser Héctor Silva said, which suggested higher well failure probability in the original trajectory.

PEP also changed its drilling equipment. 

The drilling campaign is now expected to extend through Saturday, followed by termination ending in August. 

In recent months, PEP has moved exploratory activities from its shallow water Uchukil field to Comalcalco.   

But the commercial prospects remain uncertain. Racemosa is estimated to contain 69Mboe (million barrels of oil equivalent), with recovery prospects of 38% and associated costs of US$43.5mn.

On Tuesday, PEP also reported circulation “losses and problems with the well” to CNH, Silva said. 

The modification plan did not detail if PEP had already changed the drill trajectory. But according to approved plans, drilling should conclude by June 13, suggesting PEP changed the trajectory already, prior to seeking CNH approval – and CNH commissioners reacted with questions and criticism. 

WIDER OPERATIONS

The Racemosa problems, which PEP apparently has seen coming since March, suggest larger operational problems at Pemex.

In its modification plan, PEP’s budget for the Racemosa well remained the same, although the changes implied higher equipment costs and work delays.

“I think they should make changes to the costs, because now they are working with private equipment and before they were using Pemex equipment,” commissioner Néstor Martínez said. He added the trajectory change and the different equipment certainly meant “it delayed everything, and there were higher expenses.”

Even prior to the oil price crash, rumors emerged about Pemex delaying contractor payments. Then it disclosed a US$23bn first-quarter loss. 

Still, while the NOC said it is focusing on seven new fields rather than the 20 priority fields it was eyeing at the start of the year, it has yet to announce specific operational changes focused on producing more oil profitably.  

This has fueled speculation that the company is trying to paper over structural operational problems and its US$100bn debt. 

In the last week, Bloomberg reported that Pemex has canceled 45 contracts for almost US$160mn, possibly putting 8,000 out of work.  

Pemex has yet to comment on the cancellations.