Offshore staff

(Houston)-Mexican oil monopoly Petroleos Mexicanos (Pemex) will complete an early production test of its Noxal discovery, the first deepwater discovery for the company, by the end of April.

In an announcement at the American Association of Petroleum Geologists meeting in Houston, Pemex VP for Exploration Adan Oviedo said, "At the end of the month we'll know the flow rate."

Pemex estimates that the deepwater Noxal I well gives access to a reservoir containing approximately 200 MMbbl of oil. "We are expecting to have both gas condensate and super-light oil," Oviedo said.

In addition, the surrounding Coatzacoalcos deepwater basin, whose discovery was announced in March, may contain 10 Bbbl of oil, Oviedo said.

Pemex is hoping for a resurgence through access to deepwater GoM hydrocarbon resources. The company has experienced dwindling reserves since 1999 due to a reported lack of sufficient exploration investment. A large share of the country's production of 3.3 MMb/d of oil comes from the Cantarell field, which began declining this year.

The Mexican oil giant is able to undertake exploration tasks in the deep GoM by itself, as the technology is readily accesible, said Oviedo. "The big problem is the exploitation. It means we've got not only to acquire the technology, but also the know-how."

Pemex may require the help of foreign oil companies to produce the deeper areas, where giant offshore platforms can cost up to $1 billion, but such associations are currently prohibited by Mexican law.

4/24/2006