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Page added on May 27, 2011

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PEMEX’s big new natural gas discovery

Geology

First in was Brazil, with PETROBRAS discovering vast offshore oil fields in the Santos Basin in the waters of the South Atlantic.

Now it appears to be Mexico’s turn to strike it rich. Last week, Mexican oil company Petróleos Mexicanos (PEMEX) announced the discoveryof an area with natural gas production potential in deep waters in the Gulf of Mexico. The find is at a well some 90 miles northwest of Coatzacoalcos, in the southern Gulf of Mexico, in 1,198 meters of water. A PEMEX test well (at a total depth of 3,374.6 meters, the company’s deepest well ever), has hit pay dirt (natural gas and condensates). Initial tests show that the gas field holds an estimated 400 to 600 billion cubic feet of reserves.

The find comes as good news for PEMEX and the Mexican economy. PEMEX (which accounts for some 40% of the Mexican government’s revenues and about 7% of its export earnings) announced in 2010 that its total proved, probable, and possible reserves in Mexico were only about 43 billion barrels of crude oil equivalent (or about 31 years of production) and that its proved oil reserves had dropped sharply over the last decade.

Since 2004 PEMEX has discovered significant gas fields through the 10 deepwater wells it has successfully drilled, which could boost natural gas reserves by almost 1 trillion cubic feet.

Now here’s the bad news. Unlike the Brazilian deepwater finds these discoveries are primarily of natural gas, not oil. The exploration and production of deepwater gas wells is expensive, and weak natural gas commodity prices have meant a low return-on-investment scenario, stymying the Mexico-City based company’s plans to exploit the deposits.

Consequently, PEMEX is focusing on crude oil production (which is supported by high crude oil prices) mainly in southeastern Mexico.

But going forward the Mexican government is glad to have the natural gas finds “in the bank” as oil reseves decline and natural gas prices recover.

Bizmology



One Comment on "PEMEX’s big new natural gas discovery"

  1. Ham on Fri, 27th May 2011 8:09 pm 

    Looks like enough gas to last another generation; however, we need to make choices. Rather than wasting it all on feeding cars we need to keep the disasterous monoculture of agriculture going
    until a permaculture transition takes place.
    Phosphorus depletion although is another issue. There are now no excuses for the poisoning shale processes to continue, and it must be terminated.

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