Chicontepec Field Development Requires US$30bn Investment

Mexico's state oil firm Pemex needs to invest some US$30bn to develop the Chicontepec field by drilling 20,000 wells, Pemex Exploracion y Produccion director Carlos Morales said at an oil industry event on Thursday, as reported in a Pemex statement.

Some 40% of Mexico's crude oil reserves are in the Chicontepec field between Puebla and Veracruz states, Morales said.

Production from the Chicontepec field will help replace falling output from Pemex's Cantarell field, which is declining after 25 years of exploitation.

Replacing Mexico's declining crude oil reserves as well as deepwater exploration and the development of marginal fields are the most urgent challenges facing the local oil industry, Morales said.

The application of new technology has increased hydrocarbons recovery rate to 35% at present from 22% in 1980, Morales said.

Morales made the comments during his swearing-in ceremony as president of the national oil engineers' college.

At the same event, Pemex CEO Luis Ramirez said the federal government has invested some 70bn pesos (US$6.3bn) in oil exploration during President Vicente Fox's administration, double the amount invested by previous administrations.

These investments have allowed Pemex to detect more than 1,000 new locations with hydrocarbons potential and drill more than 350 oil wells, Ramirez said.

During the present administration, Pemex has started prospective works for 54 billion barrels of crude oil equivalent and increased its reserves recovery rate to 65% in 2005 from 14% in 2000, Ramirez said.

The Fox administration ends on November 30, 2006, with general elections scheduled for July.

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