Spread across the states of Veracruz, Puebla, and Hidalgo, Chicontepec is Mexico’s largest hydrocarbon reserve to date, with around 17.7 billion boe and 28.4tcf of probable gas reserves. Such was the enthusiasm for its potential that President Vicente Fox once announced that PEMEX would invest US$37.5 billion by 2026, including the drilling of 13,500 wells to reach a production target of 1 million b/d by that year. The field was even seen as the heir apparent to Cantarell in being Mexico’s go-to location for oil production. However, Chicontepec would be dogged from the start, preventing it from meeting its foreseen potential. After a period of heavy investment from PEMEX, all of Chicontepec’s wells produced 22,700b/d in 2007, 29,300b/d in 2008, and 29,500b/d in 2010. Furthermore, the complex geology at Chicontepec and the combination of extra-heavy crude interspersed by pockets of light and extra-light crude made a single drilling plan difficult. Determined to improve, 2010 saw PEMEX entrust five field laboratories to companies experienced in production enhancement, including Tecpetrol, Weatherford, and Halliburton.

Paleocanal-Chicontepec

A range of technologies was deployed to various degrees of efficiency, including multifracking, water injection techniques, horizontal wells, and different combinations of these. Certain success stories emerged from this period, such as Weatherford’s work on the President Alemán field lab, which raised production from 836b/d of oil and 2mcf/d of gas in 2009 to 8,762b/d and 17.81mcf/d in 2012. Chicontepec’s total production seemed to be on the up, reaching 41,000b/d in 2010, 52,800b/d in 2011, and 68,600b/d in 2012. To date, this 2012 result has never been topped as production was down to 48,800b/d for 2014 and 43,600b/d for the first quarter of 2015. Another blow to the hopes for Chicontepec was the lukewarm market response to the round of ISC contracts in the area. Only three of the six blocks on offer were awarded, with Halliburton taking the right to operate Humapa, Grupo Diavaz’s subsidiary Operadora de Campos DWF winning Miquetla, and Baker Hughes’ Petrolite winning Soledad. After that, the market was shocked at the fee per barrels these companies had dared to table. Operadora de Campus DWF had won with a bid at US$0.98 per barrel, Petrolite stood at US$0.49 per barrel, but Halliburton had trumped everyone by successfully winning a bid at US$0.01 per barrel. This was explained by legal experts as the winning companies being willing to take a gamble to secure contracts for their integrated services. According to David Enríquez, Partner at Goodrich, Riquelme y Asociados, these companies will produce enough to make their operations sustainable but will focus on drilling wells, sell registry lines, and acquiring seismic data and other types of geological information.chicontepec

Shortly after this, the Energy Reform kicked off, splitting up Chicontepec’s assets. In its wishlist for Round Zero, PEMEX signaled to the markets that it would not be focusing on unconventionals, as it focused on shallow and deepwater. Ultimately, PEMEX was awarded 3.82 billion boe in proven and probable reserves across the fields of Chicontepec, Ebano, Panuco, and Faja de Oro. This left 8.93 billion boe of prospective resources and 2.68 billion boe of proven and probable reserves for companies to bid on in Chicontepec and nearby unconventional fields as part of Round One. Grupo Diavaz has already asked to change its contract in the Miquetla field in Chicontepec in order to become a full operator, as allowed by the new contract migration scheme. The Ministry of Energy has received 23 request for contract migrations; of these, 15 belong to the Integrated Exploration and Production Contracts (CIEPs).

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