Pemex to Finish Chelem Deepwater Well in February

MEXICO CITY Nov 29, 2007 (Dow Jones Newswires)

State oil monopoly Petroleos Mexicanos plans to finish the Chelem well in the Gulf of Mexico in February, the latest step in the company's deepwater exploration campaign, a company executive said.

Pemex has hired Diamond Offshore's Ocean Voyager to drill the well, which is currently at around 850 meters below the seabed, Pemex Exploration and Production Director Carlos Morales told reporters during a tour of oil installations Wednesday.

He said Pemex is already looking for a new drilling site to begin the next deepwater well in March. Each well, which lie in waters of up to 3,000 feet deep, costs the state firm around $150 million.

Pemex found non-associated natural gas after drilling the Lalail well in 2,600 feet of water during the third quarter of this year.

Lalail is 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.

Pemex has only nine years of proven oil reserves at current production rates, and the company is hoping to find new deposits in deeper waters of the Gulf to compensate for declining output at its traditional areas. Pemex plans to begin producing oil at deep water projects in 2014.

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

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