Pemex: 2 New Wells Have 180 Million Barrels 3P Oil

(AP, 9.Oct2018) — Mexico’s state-owned oil company says two wells in shallow Gulf of Mexico waters have found about 180 million barrels of proven, probable and possible oil and gas reserves.

The Manik well is about 52 miles (85 kilometers) offshore, and the Mulach is about 11 miles (17 kilometers) offshore.

In April, Manik found two separate reserves, and Mulach found five oil pockets.

The Pemex oil company said Tuesday four other shallow-water fields discovered between 2011 and 2016 will enter production soon.

The Kinbe and Koban fields hold about 325 million barrels of 3P reserves, and the Xikin and Esah fields hold 360 million barrels.

Pemex’s production dropped to 1.88 million barrels per day in the first half of 2018, down from 3.4 million barrels per day in 2005.

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Pemex Finds 2 New Oil Fields in Gulf of Mexico

(FT, Jude Webber, 9.Oct.2018) — Mexican state-owned oil company Pemex said it had discovered two new shallow water fields that, combined with other discoveries in recent years, would add production of as much as 210,000 barrels of oil per day and 350m cubic feet of gas.

The Manik-101 A and Mulach-1 fields, in shallow waters of the south of the Gulf of Mexico, could contain so called possible, probable and proven reserves of 180m barrels of oil equivalent and are located near existing infrastructure. The discoveries included light and super light oil, which is the most used by Mexico’s refineries.

Carlos Treviño, Pemex chief executive, said the discoveries represented a “good platform” for the incoming government of Andrés Manuel López Obrador, which takes office on December 1. Mexico’s oil production has been in steady decline since 2004.

Pemex said Manik-101 A was expected to produce 10,000 to 15,000 bpd of oil, while Mulach-1 was expected to produce 20,000 to 30,000 bpd of oil.

Pemex also spelt out expected production at four previously discovered fields — Kinbe, Koban, Xikin and Esah-1.

Kinbe was expected to add 24,000 bpd of oil and 35m cubic feet a day of gas. Koban is expected to produce 46,000 bpd of oil and 219m cubic feet per day of gas. Xikin should add 70,000 bpd of oil and 91m cubic feet of gas. Esah-1 will produce 23,000 bpd of oil and 9m cubic feet of gas a day.

Esah-1 is expected to begin production next year and Xikin in the first quarter 2020.

Total investment in the six fields was expected to be $7bn to $10bn, said José Antonio Escalera, Pemex’s exploration director.

Pedro Joaquín Coldwell, energy secretary, said the new discoveries were among the 10 most important in shallow waters in the last 15 years and said they meant Pemex would be close to reversing the downward trend of oil reserves in the next two years.

The announcement will be music to the ears of the president-elect, who wants to boost production by at least 600,000 barrels per day by the end of his six-year term, including some 280,000 from the private sector.

Pemex’s production sank to 1.816m barrels of oil per day in August and this year’s goal had been 1.951m, but Mr Treviño told an oil congress last month that the output this year would be “significantly” under target and Pemex would need to import 100,000 barrels of light crude a day in October to meet refining needs. He declined to give a new output goal for 2018.

Mr López Obrador has softened his former opposition to a landmark energy reform four years ago that opened Mexico’s energy sector to private investment but nonetheless seized on that as proof that the reform was failing to deliver as expected.

Mr López Obrador has announced a sweeping “rescue” plan for the sector, including a $4bn capital injection for Pemex and construction of a new refinery and improvements to Pemex’s existing six refineries. He has yet to spell out how he intends to pay for the projects but Arturo Herrera, incoming deputy finance minister, told the FT Pemex’s debt would not be increased.

The incoming government has said it will auction service contracts to drill existing Pemex assets but has not yet said whether the next scheduled oil tenders, due on February 14, will go ahead. However, those tenders include shale assets and Mr López Obrador insisted at the weekend that there would be no fracking — the horizontal drilling technique used to extract so-called unconventional resources contained in rock formations — anywhere in Mexico during his term, suggesting that at least the shale auctions would be scrapped.

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Pemex Announces Oil Field Find In Shallow Waters Of Southeast Basin

(Pemex, 9.Oct.2018) — Pemex CEO, Carlos Treviño, confirmed the discovery of seven reservoirs in two new wells in Mexico’s Southeast Basin, named Manik-101A and Mulach-1, which will allow the company to incorporate more than 180 million barrels of oil equivalent (MMBOE) of 3P reserves.

Accompanied by Mexico’s Energy Secretary and chairman of Pemex’s Board of Directors, Pedro Joaquín Coldwell, Carlos Treviño outlined the progress the company has done in the two fields as well the development of two other fields that will commence production in the near future.

These new shallow water discoveries will become part of Pemex’s portfolio of fields under development that have been discovered in recent years. The combined peak production of the six fields Pemex is currently evaluating and developing could be up to 210,000 b/d. and 350 MMcf/d of natural gas.

Earlier in April 2018, Pemex drilled Manik-101A in a water depth of 90 meters, reaching a total depth of 4,765 meters. It is located northeast of the Manik field and is between the Ixtal and Ixtoc fields, 85 kilometers from the coast and 102 kilometers from Ciudad del Carmen.

Manik-101 discovered two oil reservoirs, one in the Upper Jurassic Kimmeridgian and another at the Upper Cretaceous horizon. Pemex estimates Manik holds 80 MMBOE of 3P reserves.

Also Pemex successfully drilled Mulach-1 located 8 kilometers from the Yaxche Field and 17 kilometers from Paraiso, Tabasco. This well has a water depth of 21 meters, reaching a total depth of 3,976 meters.

The well discovered five oil reservoirs of light oil in sandstone, dating to the Upper Miocene. Pemex estimates Mulach holds 3P reserve superior to 100 MMBOE.

Treviño also informed that Pemex is assessing its Kinbe and Koban fields, each discovered in 2011 and 2016 respectively. Both are expected to hold important quantities of hydrocarbons.

The Kinbe field is located in the Jurassic rocks and is expected to produce light crude. The field is in a water depth of 21 meters, and a total depth of 5,843 meters.

It is located 28 kilometers from the city of Frontera, Tabasco, the Kinbe-1 well produced more than 5,000 b/d during production trials. Kinbe holds 3P reserves estimated over 120 MMBOE.

Pemex is also delineating its Koban field. Which has a water depth of 11 meters and a total depth of 6,400 meters. The Koban well holds gas and condensate in fractured lime stones of the Cretaceous period with estimated 3P reserves of 205 MMBOE.

Finally, Treviño informed Pemex will soon begin developing its Xikin and Esah shallow water fields. Both fields were discovered in 2015 and hold a combined 360 MMBOE of 3P reserves.

In a water depth of 32 meters, Xikin is located 31 meters from the city of Paraiso, Tabasco. It is in shallow waters 24 kilometers from the coast.

The total depth of the field is located between 6,400 and 7,050 meters and will produce light oil. It has 3P reserves estimated to be around 230 MMBOE.

Additionally, Esah is located 70 kilometers from the coast and 94 kilometers from Ciudad del Carmen, Campeche. The field is in a water depth of 67 meters with a depth ranging 4,200 and 4,700 meters. This field will primarily produce crude, with 3P reserves of 130 MMBOE.

These discoveries are the results of the focus of Pemex’s investments towards areas of greater prospective for oil and they confirm the potential of the Southeast Basin.

Additionally, given its proximity and current infrastructure, its future development will contribute to accomplish the production goals laid out by Pemex in coming years.

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#LatAmNRG

Jamaica’s Oil Search Could Suffer Due to Climate Change, Warns Expert

(RJR News, 9.Oct.2018) — There is an ominous warning about the possible economic fallout for Jamaica due to changes in the climate, as outlined in the latest United Nations report on the issue.

Professor Michael Taylor, Director of the Climate Studies Group and Dean in the Faculty of Science and Technology at the UWI Mona, has shared worrying information on the implications for oil exploration and energy use.

In its 700 page report, the Intergovernmental Panel on Climate Change warned that the world has only 12 years to make massive changes to limit global warming to moderate levels, or there would be catastrophic consequences.

This requires radical changes in transportation, energy use, and building infrastructure, in addition to reducing current coal consumption by one-third.

But with oil exploration being an emerging activity for Jamaica, and with fossil fuel also holding potential economic benefits, there could be a fallout if conditions are not improved globally.

Professor Taylor, who shared his outlook Monday while speaking on RJR’s Beyond The Headlines, is recommending that special planning be done to avoid economic losses.

“As we now plan for the future, we must plan for the future bearing in mind this goal of one and a half degrees by the end of this century; and so our oil exploration, what we premise energy on, has to be something that we think about seriously,” he urged.

The report also highlights the potential harm for agriculture and related industries, in addition to the risk of more intense natural disasters.

“It lays out some of the significant threats at one and a half degrees and worse at two degree… These are the sea level rise threats, the more intense hurricanes…the challenges for water, the challenges for livelihoods that are linked to agriculture and to the coasts, the challenges for natural resources, coral reefs…”

Professor Taylor indicated that small countries such as Jamaica remain extremely vulnerable in this regard, so the issue of rising temperatures is troubling.

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IEA Urges Opec to Open Taps as Oil Markets Enter ‘Red Zone’

(Bloomberg, Javier Blas, Grant Smith & Francine Lacqua, 9.Oct.2018) — Oil prices have rallied to a four-year-high due to US sanctions on Iran and the Venezuelan crisis, even as Saudi Arabia moved slow on filling any shortfall.

The International Energy Agency (IEA) made a direct appeal to Organization of the Petroleum Exporting Countries (Opec) and other major oil producers to boost output, warning that high prices are inflicting damage on the global economy.

“We should all see the risky situation, the oil markets are entering the red zone,” IEA executive director Fatih Birol said in an interview on Tuesday. “Expensive energy is back at a bad time, when the global economy is losing momentum. We really need more oil.”

Oil prices rallied to a four-year high above $85 a barrel in London earlier this month on concern that US sanctions on Iranian crude, along with chronic supply losses in Venezuela, could lead to a shortage. Traders are also worried that Saudi Arabia, the biggest member of the Opec, isn’t acting quickly enough—or may lack the capacity—to fill any shortfall.

Prices were boosted further on Tuesday by storm Michael, which shut some oil fields in the Gulf of Mexico and threatened to hit the Florida panhandle as a major hurricane. West Texas Intermediate futures advanced 0.6% to $74.71 a barrel on the New York Mercantile exchange at 8:34am local time.

Hurting demand

Emerging economies, most notably India, are bearing the brunt of the increase in energy prices, which comes when they’re already contending with currency depreciation and the fall-out from trade disputes, Birol said. With the drop in the rupee, Indian consumers are effectively paying as if oil were $100 a barrel.

“If there are no major moves from the key producers, the fourth quarter of this year is very, very challenging,” Birol said. “Demand is still very strong and we’ve been losing oil from Venezuela in big amounts, and also Iran is going down.”

Venezuela’s oil production is in “free-fall” as an economic crisis takes its toll on infrastructure and workers, and could slump below 1 million barrels a day “very soon,” Birol said. The Paris-based IEA advises most major economies on energy policy.

Iran’s exports have dropped faster than most in the industry expected, with many major buyers halting purchases even before US sanctions are enforced in November. To fill that gap and cool the price rally, Saudi Arabia has bolstered production to near record levels, pumping 10.7 million barrels of crude a day.

While the kingdom has repeatedly said it will do whatever is necessary to avert a shortage, at an Opec meeting last month it signalled it would only open the taps once it’s clear more crude is needed. As Saudi output nears unprecedented levels, it’s uncertain how much more supply the country can deliver.

The Saudis are able to increase further and reach 11 million a day, Birol said, adding that he’s fully confident the kingdom will act responsibly. The IEA isn’t currently considering the use of its emergency oil reserves, he added.

“We should try to comfort the markets all together,” Birol said. “It may be bad news for the consumers, importers today, but I believe it may well be bad news for the producers tomorrow.”

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Cutting India’s Dependence on Middle-East Oil: 60% More Oil Lifted from Colombia

(Financial Express, Huma Siddiqui, 9.Oct.2018) — With the India-Colombia bilateral trade $1.5 bn, India lifted oil close to $ 400 million from January to July this year– an increase of 60% in the same period of the previous year.

With the India-Colombia bilateral trade $1.5 bn, India lifted oil close to $ 400 million from January to July this year– an increase of 60% in the same period of the previous year.

Speaking to FE ONLINE, on condition of anonymity, a very senior diplomat said that, “As US imports of Colombian and of other origin continue to decline, impending sanctions on Iran next month, supply constraints of OPEC, India is expected to look at other markets.”

“Imports of oil from Colombia and Ecuador will go up substantially in the coming months,” the senior diplomat added.

India has been looking at other countries for its energy security due to impending second round of US sanctions in November targeting Iran’s energy sector, and political unrest in South American nation Venezuela.

India has been gradually planning to increase the crude imports from Latin American nations to 50% over the next few years, sources confirmed to FE ONLINE.

There are four areas of cooperation in the oil sector identified by oil companies of both countries which cover:  exploration and production of oil; activities of refining, processing and purification of hydrocarbons; and looking for more oil in the country.

ONGC Videsh has operations in the Llanos field in Colombia’s Orinoco and explored five wells. The same company owns 50% of the Mansarovar, in a joint venture with the Chinese company Sinopec, in the region of Magdalena Medio.

During the last week’s visit of Minister of State for External Affairs, Gen VK Singh (Retd) to Colombia, it was decided that the Joint Study for negotiating Partial Scope Agreement to enhance bilateral trade will be finalised soon between the two countries.

The two countries are seeking for expansion of bilateral trade and investment in areas including IT, pharmaceuticals, automobiles, agriculture, urban planning & development, and Start ups.

India and Colombia in 2019 will be celebrating 60 years of establishment of diplomatic relations and decided that this historic milestone be celebrated in a befitting manner.

As reported by FE earlier, ONGC Videsh has discovered hydrocarbon reserves in its Mariposa-1 well, which is under drilling in CPO-5 block of Colombia. Also, Ecuador has inked a confidentiality agreement with ONGC Videsh and has been in discussion about the new blocks available in that country.

The Indian company which is already present in Colombia is exploring the possibility of expanding their footprints in Ecuador and has been looking at buying a stake in oil fields there. ONGC is looking for fields with a minimum 25,000 barrels per day of oil production.

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