Murphy, Repsol, Petronas to drill several wildcat wells in Mexico in 2019-20
By Daniel Rodriguez / Platts
Petroleumworld 04 01 2019
Murphy Exploration and Production, Repsol and Petronas expect to drill exploratory wells in 2019 and 2020 in Mexico's highly prospective deepwater despite the political uncertainties in the country, executives said Thursday.
"There might be a lot of speculation, off news out there, on what might happen with the energy reform, but at the end of the day, we were able to get our permits to drill," Adam Seitchik, Murphy's exploration general manager, said at a panel discussion.
Murphy hopes to continue drilling activities by the summer of 2020 after completing additional analysis on its recent Cholula deepwater discovery, Seitchik said at the Shallow & Deepwater Mexico Expo in Ciudad del Carmen in Campeche state.
"There were few options globally with low-risk and high resource potential like Mexico," Seitchik said.
"Mexico is probably Repsol's most important exploration acreage in the Americas," Sergio Limardo, Repsol's Mexico country manager, said at the panel. The company has six offshore blocks in Mexico.
"The work the company is doing in Mexico isn't replicated anywhere else," Limardo said. Repsol expects to drill two exploration wells next year in Mexico, he added.
Repsol will drill Block 29 next year in the Salina Basin from the Deepwater Auction Round 2.4. The company won the block along with partners Sierra Oil and Gas, Petronas and PTTP with $150 million, the largest cash payment ever submitted at a Mexican auction round. The block is the largest in the Salina Basin with 3,250 sq km.
Mexico is a core strategic place for Petronas, said the company's head of exploration in Mexico, Puteri Nurlina. "There are big opportunities in Mexico, and that is reflected in the number of blocks our company has," she added.
With 10 blocks, Petronas is the largest acreage holder in Mexico after state oil company Pemex. The company and its partners have pledged to drill nine offshore exploration wells as part of its bidding commitments.
In 2019, the company will drill its first well, the first pre-salt wildcat in the Salina Basin, according to Mexico's National Hydrocarbon Commission. In 2020, the company expects to drill additional wells, Nurlina added.
MURPHY: ACCELERATED DEVELOPMENT TIMES
At the panel, Repsol, Murphy, and Petronas said that typically it had taken eight to 10 years to develop deepwater projects, although companies seek to speed up their activities.
"Something attractive about Mexico is the abundance of data at the time we came and bid for blocks. This data has allowed us to bid for those areas and move our activities faster," Repsol's Limardo said.
On the sidelines of the conference, Seitchik said that eight to 10 years is too long a period for Murphy to develop deepwater projects. "The longer you sit on a project, the less valuable it becomes," Seitchik added.
For Murphy, the desired time framework to develop a deepwater project is about five years, he said, which is a doable goalbased on Murphy's previous experiences such as the Kikeh deepwater project in Malaysia.
Kikeh took five years from discovery to the first barrel of oil produced, using a floating production and storage offshore unit with a 120,000 b/d of oil, and a water depth of 1,330 meters, Murphy's website shows.
Seitchik declined to comment on the resources or how long it would take to develop its Cholula deepwater discovery in Block 5 of the Salina Basin. "The only thing I can say is that we are happy with what we found," he said.
Block 5 was the most coveted block in Deepwater Auction Round 1.4. Murphy won the area in a joint bid with Petronas, Ophir, Sierra Oil and Gas, beating majors Statoil, Shell and ENI. According to Seitchik, the area has between 800 to 2 billion barrels of oil of prospective resources.
On March 12, Ophir during its quarterly result call said Cholula was successful, finding oil in line with expectations, though the area will require further drilling to prove its commerciality. The London-based company is selling its stake at Block 5 as it is cutting exploration expenses.
CNH previously said that Cholula, at a water depth of 750 meters, has a gross resource potential of 200 million boe. Right next to this discovery, Murphy has identified two other potential exploratory targets: Comala and Santiago.
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Story by Daniel Rodriguez; Edited by Jennifer Pedrick from Platts / SPGlobal.
spglobal.com 03 26 2019
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