Pemex and Petrobras Bet Big on High-Risk High-Reward Drilling Off Mexico
Iraq Wants to Double Oil Output—and Needs OPEC to Get Out of the Way What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… Mexico’s state oil firm Pemex and Brazil’s national oil company Petrobras are joining efforts and expertise to drill prospects in Mexican waters in the Gulf of Mexico, hoping to unlock huge oil resources from source rock formations that are miles deeper and eight times older than the currently producing formations in the U.S.
Exploration in the Jurassic formations deep under the Mexican Gulf seabed in the Campeche Bay carries high risks, but the reward in case of a discovery could be enormous, geologists and analysts tellBloomberg.
Back in 2018, Pemex drilled more than 7,800 meters (25,600 feet) below the sea floor and penetrated the Campeche salt layer in an exploratory well that was declared unproductive.
The Mexican oil giant hasn’t ventured new exploratory wells in the area since then, but industry experts believe that Pemex may have found something of great geological and/or hydrocarbon-bearing potential, which has prompted it to pursue exploration further.
Pemex hasn’t shared publicly any results of its 2018 drilling campaign offshore Campeche, but analysts say there is a reason why the Mexican oil giant hasn’t abandoned efforts to find huge resources and turn around years of declining domestic oil production from legacy wells.Related: America’s Next Strategic Partner Is Hiding in Plain Sight “Apparently what Pemex found did not scare them away,” Mark Rowan, a Colorado-based geologist and consultant who specializes in deep Gulf of Mexico discoveries, told Bloomberg.
“That suggests there was no absolute play-killer, and possibly something that gave them real reason to keep testing,” Rowan added.
But heavily-indebted Pemex can’t do it on its own drilling deep beneath the sea floor.
That’s why it has partnered with Brazil’s Petrobras, which has two decades of experience drilling in the pre-salt layer offshore Brazil, where it has opened one of the most prolific offshore oil plays in the Santos and Campos Basins.
The pre-salt discoveries in these basins have propelled Brazil into the top ten of the world’s biggest oil producers in the past decade.
In June, Pemex and Petrobras, the biggest oil companies in Latin America,signeda memorandum of understanding for strategic and technical cooperation to assess, develop, and jointly execute projects, including opportunities in Exploration and Production (E&P).
The companies will evaluate development opportunities in deepwater and ultra-deepwater areas, including assets located in the Gulf of Mexico.
“The partnership also includes the exchange of technical knowledge, technologies and best practices, leveraging Petrobras’ recognized expertise in highly complex offshore operations,” Brazil’s oil giant said.
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