Mexico's state-run oil and gas giant Pemex has signed a deal to redevelop Gulf of Mexico oilfields in a $1.65-billion investment plan that aims to increase output 10 times in the next 3.5 years.
Citing unnamed sources close to the deal, Pemex (Petroleos Mexicanos) has struck a deal with CEM Oil and Gas, a Mexican private-sector player, to redevelop the Bacab and Lum fields in the Gulf of Mexico.
The Bcaba and Lum oilfields produce heavy oil in shallow water at a depth of around 200 feet; however, according to data from Offshore Technology, the fields recovered over 93% of total recoverable reserves, and peaked in production in 1993. Without redevelopment, the producing oil field will deplete its currently recoverable reserves in 2033.
Both oilfields are in the massive Ku-Maloob-Zaab play, which covers 121 square kilometers and includes five fields.
According to Bloomberg sources, CME will expand well depths in both plays to boost production to 40,000 bpd by 2028. The $1.65-billion investment will reportedly be made over the course of 15 years, and CME assumes costs and risk associated with the redevelopment plan.
Bloomberg sources said the plan projects 74 million barrels of output and $4.3 billion in revenues-half of which goes to state coffers.
Pemex did not respond to Bloomberg, and reports have not been independently confirmed.
Once one of the world's most successful oil companies, Pemex, has been falling increasingly into debt over the last decade, only surviving by pursuing cheaper shallow-water oil operations and being bailed out by the government. The recently elected incumbent Mexican president, Claudia Sheinbaum, is expected to continue supporting President Andres Manuel Lopez Obrador's (AMLO) ambitious oil and gas plans despite Pemex's failings.
By Tom Kool for Oilprice.com
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