Pemex Expects Noxal Deepwater Oilwell Results in February

Mexico's state-owned oil company Pemex plans to spend US$50mn drilling its Noxal deepwater crude oil exploration well, newspaper El Financiero quoted Pemex Exploración y Producción (PEP) general director Carlos Morales Gil as saying.

Pemex started drilling Noxal in November to a target depth of 900 meters and expects to obtain initial results in early February 2006, a Pemex spokesperson told BNamericas.

Noxal will be the first of 10 exploration wells Pemex plans to drill in deepwater off Veracruz state's southern coast in the Gulf of Mexico to increase oil reserves by about 4 billion barrels, according to Morales.

Pemex's deepwater exploration costs US$7-8 a barrel for depths over 1,000m, so investment requirements could total about US$30bn, Morales said.

Next year Pemex plans to offer integrated contracts for the nine remaining deepwater wells including drilling equipment rental and platform construction which until now have been awarded separately.

Pemex also plans to offer long-term drilling contracts for up to five years to attract new deepwater drilling technology, which is in high demand around the world.

At present Pemex has 5,500 oil production wells including 200 in the Cantarell field but some 2,000 are shut in.

Pemex will workover shut-in oil wells to maximize production but it is expected that even then they will only produce marginal amounts of oil.

Cantarell's production is expected to decline by 350,000 barrels a day (b/d) in 2006, but new production in other projects should add 430,000b/d, meaning an overall increase of 80,000b/d.

As a result and by drilling 600 more oil wells next year than in 2005, Pemex expects to increase production modestly to 3.42 million barrels a day (Mb/d) in 2006 from an average 3.34Mb/d in 2005, Morales said.

Total investments by Pemex in 2006 oil exploration projects will be 106bn-110bn pesos (US$9.9bn-10.3bn) to be spent on the Ku Maloob Zaap light crude oil project as well as on the Bermúdez marine southern region and Jujo projects, the paper reported.

Pemex also plans to invest in unassociated natural gas projects in Veracruz state and the Burgos basin in the northern region, the paper said.

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