News

13
Nov

Mexico Approves Major Shell, Pemex Offshore Projects

The Mexican hydrocarbons commission (CNH) approved a spate of oil operations on Wednesday that included a pair of costly offshore plans by the country’s state-owned firm Pemex and global oil giant Shell.

Shell put forth an ambitious plan for an exploratory well – Chibu-1EXP- in ultra-deep waters, located in the CNH-RO2-LO4-AP-CS-GO1/2018 assignment that the firm acquired in Round 2.4.

Shell will target the well at a water strap of 2,760m.

Drilling will be complicated by navigating two different geological formations. Its primary objective lies in the Oligocene stratum, at a depth of 3,714m. Shell estimates 143Mboe in potential reserves and placing the geological success probability at 26%.

The secondary objective is yet deeper, at the Late Jurassic site with depths of 6,110m. There Shell estimates to find 76Mboe, with a geological success probability of 13%.

Combined, Shell’s seismic surveys of the area suggest a potential 219Mboe of 28° API oil.

Beyond the sheer size of the site – representing about 3% of Mexico’s proven oil reserves – the investment signals willingness to invest where Mexico’s oil sector needs it the most, in deep offshore waters.

“This well is very good news,” said CNH commissioner Héctor Moreira, “because it implies that we’re now entering in deep water.”

Given the depths, Shell expects more than US$93mn in layouts on Chibu-1, a large sum for a single exploratory well.

Shell will begin to drill Chibu-1 on December 5, relying on a platform ship it owns, the Deepwater Thalassa. According to the plan, the company will finalize exploration on February 21 and cement the well by March 1, 2020.