Mexican regulator approves low-cost exploratory wells

Bnamericas Published: Friday, May 15, 2020
Mexican regulator approves low-cost exploratory wells

Mexico's hydrocarbons regulator CNH has approved a pair of exploratory well plans in Pemex’s Uchukil field, along with an onshore well that Newpek plans to drill in the mature Burgos field. 

In the shallow water Uchukil assignment (AE-0148-Uchukil), Pemex Exploración y Producción (PEP) will drill Camatl-1EXP in water 27m deep, at a location about 98km southeast of Dos Bocas port. 

The operator expects Camatl to have 53Mboe (million barrels of oil equivalent), which it expects to recover with a 50% geological probability of success. 

The nearby Cahua-1EXP well has properties that correlate to Camatl-1EXP. 

Source: CNH

PEP expects to begin drilling the Camatl well on June 11 and terminate the exploratory well on August 16, 2020. It will spend a total of US$21.6mn on the well, US$14.2mn on drilling and US$7.4mn on termination. 

During the same regulatory session, PEP also won approval to modify its drilling plan for the exploratory well Chi-1EXP, also in 27m waters in the Uchukil field

“With respect to the proposal, we can say that the proposal of a sidetrack is in line with the objective to accelerate the knowledge of the oil potential of the country,” CNH technical advisor Iván Jesús Pérez said, adding that the presence of a normal fault line in the area had prevented completion of mapping and studies. 

PEP presented the amendment plan to CNH on April 15. However, given the low expense of the well and the low expectations, the post-oil crash plan is unlikely to be indicative of PEP’s strategy. 

The operator expects 9Mboe from Chi, with a 58% geological probability of success. 

PEP expects to spend US$5.4mn on the amendment. The modified Chi well will be drilled from May 15 with termination on June 4. 


Newpek Exploración y Extracción also received approval to drill Las Prietas-1EXP on its Burgos onshore assignment, CNH-R02-L03-BG-03/2017.

Newpek will drill the exploratory well to reach separate Oligocene plays, at depths of 3,089-3,217m and 3,495-3,595m. There the operator forecasts that it will find oil and condensate at 55°API. 

Source: CNH

Since 2017, one of the operator’s principal exploratory activities has been to complete seismic 3D studies of the assignment. Drilling around Las Prietas, though, has been snared by delays in environmental permitting and floods. 

With the approval, Newpek will begin drilling on June 1 and aims to terminate the well on August 9. 

The 30-day termination period, long by comparison to many onshore exploratory wells, is drawn out by the likelihood that the company does not find oil and abandons the site. 

Indeed, while cheap, Newpek expects to spend only US$6.1mn on drilling and termination of Las Prietas, the operator faces long odds. 

While the area has prospective reserves of almost 84Mboe, the geological probability of success is only 22%. Nearby wells in the Burgos field turned out dry (Escobar-5, -6 and -7), and they are possibly too old to serve as sound corollaries, having been drilled by Pemex in 1970. 

Newpek’s plan was first presented on February 17, while PEP first presented its plan for the Camatl exploratory well to CNH on February 25, in both cases before the steep drop in oil prices.

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