1.1.1

 The following is the eighth 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.

8.3

In a panel seeking to answer major questions about the future of unconventional resources in Mexico, Arindam Bhattacharya, the Director General of Schlumberger Mexico, sat down with Vinicio Suro Pérez, Director General of IMP, and Rogelio Montemayor Seguy, the President of the Mining and Petroleum Cluster of Coahuila.

Bhattacharya began by outlining differences between the US and Mexico. “The US has 60 billion barrels of oil equivalent in unconventional resources and 32,000 wells have already been drilled to tap into these reserves. Can Mexico match that level of activity?” he asked. He divided the challenges associated with unconventional resources into above and below ground. Above ground, efficiency must be maximized in unconventional operations. To do so, logistics, infrastructure, resource management (water, sand), and community relations are all essential.

8.2

For subsurface activity, a lot of wells are vertically drilled and new scientific advances have not yet been applied in the shale assets of the Mexican oil and gas industry. Schlumberger has sought to help science catch up, by investing a lot in technology and shale exploration. “Science-guided exploration will help find sweet spots, optimize the completion design to ensure we only complete where we can return our investment. We have to maximize production while minimizing resource usage. This is why a complete unconventional field development plan is needed. This would involve identifying specific drilling techniques and optimum circulation techniques on a well-by-well basis to help ensure resource optimization,” said Bhattacharya. He added that doing so could improve resource utilization between 20 and 50% on different wells as well as improving efficiency by focusing on sweet spots only.

He added that the successful development of shale resources would depend on collaboration between many stakeholders, including education, security, social, fiscal, logistics, resource management and infrastructure.

Suro admitted that so far, IMP had treated unconventionals much in the same way as conventional resources, even using the same tools. “We explore with seismic data, we drill with the same equipment, and we use resources in the same way. We have to free ourselves from the conventional line of thought, and treat unconventionals differently,” he said.

He added that while sweet spots might be easy to fracture, engineers need to find them, meaning that close attention must be paid to each formation’s saturation, such as those with deeply embedded hydrocarbons. He said that carrying out such a careful analysis of the lithology would define the saturation, revealing the sweet spots and indicating where to frack.

8.1

From left, Vinicio Suro and Rogelio Montemayor

Montemayor, from his vantage point, spoke about how Coahuila is aware of the important unconventional resources within its borders. He extended a formal invitation to Mexican corporations to participate, although he said the state was aware of its border with the Eagle Ford and of the differences in infrastructure it had with the US giant. “Nevertheless, we have kept fighting to create links with universities, including 11 in Coahuila, and to help graduates work in the oil and gas industry. Coahuila is always asking itself how to improve its educational offering in the near future, while also improving needed infrastructure in dozens of places in the state.”

He spoke of an institutional weakness at the federal and local levels that the six committees of the Coahuila cluster are aiming to pally. But as the obstacles in the way of the Energy Reform are overcome, such as the legal framework, he expects that such weaknesses should begin to fade. “The reform will help solve local issues faster. Our association is working to help solve these through fast procedures and permitting processes that carry no surprises. We are working to shorten administrative time and improve project productivity.”

Montemayor concluded that institutions like the cluster could take the initiative to convince companies already working in the Eagle Ford to cross the border. Bhattacharya agreed, saying that the Eagle Ford already has 60 operators. “The appraisal of each side of the border will reveal the need for operators on each side. The projects in the US and Mexico are at utterly different levels of development so the country needs to catch up,” he said.

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