Pemex Awards Contracts for Chicontepec Drilling Pads

In an effort to boost its drilling activity in Mexico's Chicontepec onshore region, state-run Pemex has awarded four contracts totaling $154 million for the construction of 344 drilling pads and access roads. According to Pemex, work on the contracts is expected to commence this month.

Seeking to raise its crude oil output at Chicontepec to as much as 600,000 barrels a day by 2021, the company plans to develop 29 oil fields in Chicontepec utilizing these drilling pads. Unlocking Chicontepec's reserves will prove difficult for Pemex due to the area's challenging geography; however, the company hopes to counter a decline in its offshore oil production by exploiting its largely untapped onshore reserves.

In November 2008, Pemex launched tenders to build access roads and the initial infrastructure needed to place drilling rigs at 68 new sites in the Chicontepec basin. The following month, Pemex issued a second tender to carry out the drilling and completion of 500 development wells in order to increase its volume of reserves and hydrocarbon production in Chicontepec.

According to a report filed by Dow Jones Newswires, production from Pemex's offshore fields at Cantarell once peaked at more than 2 million barrels a day (b/d) in 2004, but is now averaging less than 1 million b/d.