The following is the sixth in a series of summaries of each presentation and panel that took place during the Mexico Oil and Gas Summit last Tuesday, July 1st in the Sheraton María Isabel in Mexico City. To download the speaker’s presentations which have been approved for public distribution so far, click here.
In the first of two presentations on how to address mature fields, Miguel Angel Lozada, PEMEX’s Administrator for Cantarell said that the major challenge in mature fields was to increase the recovery factor in the long-term. “We need to rejuvenate these mature fields. We want to accurately project the states of the fields, project when we need to apply enhanced recovery methods. This challenge involves IT, technology and financing,” he outlined.
He also gave some statistics as to how Mexico’s production will fare compared to the rest of the world. Mexico’s 1P reserves will allow it to produce for 10.6 years at current global average production rates, as opposed to over a century of production for the world in total. For 2P reserves, there are fields that will see their reserves exhausted in 20 years, although others may last up to 60 years, making their particular exploitation of great interest. For example, Akal has a remnant reserve of 2.3 billion barrels. “The challenge lies in that the recovery factor in PEMEX’s fields reaches 35%, but our forecasts shows this rate could jump by 10% once the right technology and applications are in place,” said Lozada.
However, he added that the cost of operations can almost double if enhanced recovery factors take the recovery factor from 35% to almost 50%. When this goes over 50%, costs increase significantly again, leading Lozada to caution that thought would have to be given to Mexico’s tax regime and PEMEX’s investment allocation to match these rises in cost.
Lozada explained that since the boom in IT development for horizontal well drilling and multi-stage well drilling in the 1990s, Mexico has seen a regular increase in production from the application of these techniques. He calls for the same logic to be applied to newer technologies such as horizontal wells. “Mexico has stressed the importance of increasing production from existing wells. The enhanced recovery methods used led to an increase in production from declining wells. Artificial lift systems, water injection, gas injection were all used to illustrate the proper management of such wells,” added Lozada.
Giving specific examples of fields, he pointed out that Cinco Presidentes began declining in 2001. But 3D seismic data elucidated new resources that had not been drilled and horizontal wells were used to recover them. In the Northeast Marine Region, Ek-Balam produced 6,000 bpd but this now stands at more than 60,000 bpd, in large part due to the use of horizontals wells. He added that sand control technology will be implemented and horizontal drilling would be maintained until Ek-Balam reached 100,000 bpd.
Edgar Rangel, Commissioner of the National Hydrocarbons Commission (CNH), took over to explain that IOR and EOR would help Mexico be successful in its brownfield projects and in mature fields, as these methods aim to extract up to the last drop of available. However, the way in which they are used must depend on the conditions of each field involved. “We have different strategies available to use IOR and EOR that can be combined to get better displacement and retrieve the hardest to reach oil by getting to the furthest corners of a well and use chemicals to extract it,” he said.
IOR methods involve any post-primary recovery methods and EOR, is a tertiary recovery technique which typically recovers remanent oil by injecting chemicals such as surfactant polymers. Rangel confirmed that the wise combination of IOR and EOR would significantly improve the recovery factor, while not wasting resources like water and gas. “Mexico has a lot of potential for the use of all these technologies. Pilot tests will prove the viability of IOR and EOR and then lead their utilization to become massive,” he said.
As part of PEMEX’s catalog, the country has a commitment to meet outputs of 3 billion barrels a day and then 3.5 billion barrels. He concluded that IOR and EOR will determine how efficient authorities can be in reaching that production level.