By Dudley Althaus
MEXICO CITY — After more than a dozen attempts, Mexico’s national petroleum monopoly has struck significant oil very near the U.S. boundary in the ultra-deep waters of the Gulf of Mexico, President Felipe Calderon said Wednesday.
“This is a great discovery,” Calderon said in announcing the find by Petroleos Mexicanos, or Pemex, beneath more than 8,300 feet of water and miles of earth, the first successful well in a system that he said ultimately may hold as much as 10 billion barrels of oil.
“It will further strengthen our petroleum reserves and will permit Mexico to maintain and increase petroleum production in the medium and long term.”
Pemex has been scrambling in recent years to replace the sharp production declines in the Cantarell offshore field at the foot of the Gulf. Earlier deep water attempts have either produced dry wells or natural gas that’s uneconomical to exploit at current prices.
Pemex estimates that its Gulf reserves may hold as much as 27 billion barrels of petroleum.
The new discovery lies in the so-called Perdido belt of the Gulf, just 24 miles from the U.S. boundary and about 110 miles offshore of Mexico’s northeastern coast. Calderon said Wednesday the initial estimate of a deposit in the Perdido area on Mexico’s side of the Gulf was between 250 and 400 million barrels.
A partnership headed by Shell Oil, Chevron and British Petroleum has been producing about 100,000 barrels a day from three fields in U.S. territory about 30 miles north of the new Pemex discovery. The companies began producing from their Perdido wells in March 2010, after three years of exploration and development of the field.
“People thought Pemex would find oil in Perdido if they could just successfully drill a well,” said Houston analyst George Baker, who closely tracks Mexico’s energy industries. Now, Baker said, Pemex will have to find the means to actually bring to market the barrels of oil in the find.
“The whole science of how you produce from deep water has little to do with the science of discovering a well,” Baker said. “It’s much more difficult.”
The discovery is likely to fuel the impending debate over further opening Pemex and Mexico’s petroleum resources to private investment. Proponents have argued that Pemex needs private investment from companies to fully develop Mexico’s petroleum potential.
Not only is private investment needed to find deep water oil, but also to develop any petroleum finds and bring them to market, they say.
Getting at the deep water oil will indeed prove difficult for Pemex. But for now the find gives Calderon bragging rights for reversing what had been a rapid decline in Mexico’s petroleum reserves as Canterell plays out and other fields had struggled to keep up.
“We received a company that had not been able to successfully explore in deep waters,” Calderon said of Pemex at the start of his six year term. “Today we leave a company that is doing so with great success.”
“We knew it was indispensable to go after this wealth,” Calderon said.
Calderon and Pemex officials said the new find would not be in production for at least another five years.
Baker said available deep water pipeline technology may enable Pemex to export its oil through the Perdido production platform jointly owned by Shell or other multinationals.
But he suggested Pemex does not yet have the technical capability to make those connections. For now the well will have to be plugged, Baker said, a procedure whose risk the Deep Water Horizon disaster made all too clear.
Calderon said the new deep water find proves that “there is no frontier so distant or so deep that we can’t cross. There is no challenge, no matter how complicated, that we can’t overcome.”