Pemex Details 2006 Oil, Gas Reserves



Mexico's state oil company Pemex reported 15.5Bboe proven reserves at end-2006, of which 11.0Bb correspond to crude reserves and 19.0Tf3 (537Bm3) natural gas, Pemex deputy director of planning and evaluation Vinicio Suro said in a conference call.

Proven reserves were down 955Mboe at year-end 2006 from the previous year, and proven, probable and possible reserves were down 1.41Bboe, largely as a result of 1.62Bboe production in 2006.

Of the proven developed reserves, which make up 69% of the total, 62% are in marine regions. Of the undeveloped proven reserves, 55% are in the northeast and southeast marine regions.

CRUDE RESERVES

Proven crude reserves were down 766Mb at year-end 2006 to 11.0Bb from the previous year. Proven, probable and possible reserves were down 1.18Bb to 31.9Bb, largely as a result of 1.19Bb production in 2006.

Of the proven, probable and possible crude reserves, heavy crude constitutes 56% and light crude 35%, with extra-light crude comprising the remainder.

Roughly 70% of proven crude reserves are offshore as are 49% of proven, probable and possible reserves.

NATGAS RESERVES

Although proven gas reserves fell some 5% in 2006 to 19.0Tf3, proven, probable and possible reserves increased 690Bf3 as of year-end to 63.0Tf3.

Of the proven, probable and possible natural gas reserves, 75% are associated and 25% non-associated.

Associated reserves comprise 66% of the company's proven natural gas reserves.

Thirty-eight per cent of proven natural gas reserves are offshore as are 23% of proven, probable and possible reserves.

2006 DISCOVERIES

Pemex discovered 183Mboe proven reserves in 2006, with 52% in the southeast basin.

Some 35% of new proven reserves were deepwater Gulf of Mexico, while 7% and 6% were in the Veracruz and Burgos basins, respectively.

The company discovered 966Mboe proven, probable and possible reserves in 2006, with 51% in the southeast basin. Specifically, 36% were deepwater Gulf of Mexico, while 6% and 7% were in the Veracruz and Burgos basins respectively.

FUTURE OUTLOOK

The integrated proven reserves replacement rate stood at 41% in 2006, with the integrated proven, probable and possible reserves replacement rate reaching 35.7% in the year.

"We maintain our goal of reaching 100% as a replacement rate [for proven, probable and possible reserves] based on an annual exploration capital expenditure of at least US$2bn on average for the following years," Suro said.

Exploration capex averaged US$1.1bn from 2000-06.

The proven integrated reserves replacement rate is forecast to increase to 77% in 2010, considering an average capital expenditure of US$11bn for exploitation.

The coming years will probably feature the reclassification of probable reserves to proven reserves, primarily due to the development of the Ku- Maloob-Zaap, Chicontepec, and Crudo Ligero Marino projects as well as delineation activities.

Pemex had been primarily focused on E&P of known areas for years, but decreasing reserves combined with falling output have prompted a recent strategy to explore and develop unknown areas, particularly deepwater.

From 2004-06, Pemex acquired roughly 3,085km 2D seismic and 12,735km 3D seismic data, which will be used to determine prospective drilling locations in the Gulf of Mexico.

In the same period, Pemex identified 234 deepwater exploratory locations and drilled four exploratory wells.

Overall, the company drilled 656 wells in 2006, of which 69 were exploratory.

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