Pemex Found Gas in Lalail Deepwater Drilling

Copyright (c) 2007 Dow Jones & Company, Inc.

Petroleos Mexicanos found non-associated natural gas after drilling the Lalail well in 2,600 feet of water during the third quarter of this year, said Pemex exploration and production chief Carlos Morales Gil in a conference call on Monday.

Morales Gil said Lalail was Pemex's fourth discovery well in deepwaters of the Gulf of Mexico, where the company says the bulk of its remaining oil and natural gas reserves lie.

Lalail is expected to have an initial production of 18.1 billion cubic feet, making it Pemex's largest discovery during the third quarter.

In its third-quarter earnings report, Pemex listed eight main discoveries, five of which were non-associated natural gas wells. The other three discoveries were natural gas and condensates associated with oil reservoirs.

At Pemex's main oil field, Cantarell, the company completed four development wells and 23 major and minor well workovers during the quarter. Pemex plans to drill another eight development wells at Cantarell during the fourth quarter of this year. Pemex is struggling to slow the rate of decline at Cantarell by drilling new wells and repairing old ones.

Cantarell produced 1.49 million barrels a day in September, nearly half of the country's total output. Pemex expects output at the field to drop to 943,000 barrels a day by 2010.

Copyright (c) 2007 Dow Jones & Company, Inc.