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Shell and CNOOC account for bulk of Mexico’s deepwater investments

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(S&P Global) Deepwater projects took the bulk of the exploration investments in Mexico during the third quarter as private companies ramp up activities.

Two exploration projects from Shell and one from China National Offshore Oil Corporation located in the deepwater Gulf of Mexico accounted for 45% of the $545.1 million dollars of investments authorized during the third quarter, Mexico’s National Hydrocarbons Commission said Oct. 20.

Big international companies are conducting all exploration activity in the deepwater Gulf of Mexico after the state-controlled oil company Pemex decided under the administration of President Andres Manuel Lopez Obrador to concentrate only on shallow waters, where it can extract crude quickly and more economically.

Shell’s Xochicalco and CNOOC’s Ameyalli have the biggest investments of the projects authorized in the period, with $117.2 million and $91.6 million, respectively, Daniel Gonzalez, CNH technical advisor said during the presentation of the quarterly results of exploration and production activity in Mexico.

These fields also have the largest prospective resources; Ameyalli holds 1,318 million barrels of oil equivalent, while Xochicalco holds 562 million barrels, CNH data shows. Together with Chimalli, also operated by Shell, these three deepwater fields hold 80% of the prospective resources authorized for exploration during the quarter, Gonzalez said.

In total, CNH approved 14 projects during the quarter, five from Pemex and the rest from private firms, Gonzalez said.

In terms of production, during the third quarter, companies in Mexico drilled 33 new wells, 30 of which were drilled by Pemex, most of them in shallow waters, CNH data showed.

In the first three quarters of the year, companies in Mexico drilled 130 new production wells with a total $600 million investment, 112 of which were drilled by Pemex, the data showed.

Total wells abandoned during the first three quarters were 217, 199 of which were abandoned by Pemex, the data showed.

CNH commissioner Alma America Porres Luna noted during the presentation that both exploration and production projects during the quarter were taking longer than originally planned. CNH technical advisor Jose Alcantara said this was mainly explained by technical delays in the operation.

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