PEMEX Strikes It BIG in Deep Water Gulf of Mexico [UPDATED]

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August 29, 2012

(Bloomberg) — Petroleos Mexicanos, the world’s fourth-largest oil producer, may have as many as 10 billion barrels of potential reserves in its El Perdido deposits in the Gulf of Mexico, a company executive said.

The Trion-1 exploration well in El Perdido, where the company struck its first deep-water oil, may hold 250 million to 500 million barrels, Deputy Exploration Director Jose Antonio Escalera said in an interview in Mexico City after the discovery’s announcement today. Mexican President Felipe Calderon said earlier that Trion may hold more than 400 million barrels of light oil.

Pemex, as the state-owned company in known, is counting on deep-water Gulf of Mexico deposits to increase production by a third in the next dozen years. The company estimates it has 27 billion barrels of untapped crude in the Gulf.

“This is a great discovery,” Calderon said. “It further strengthens our hydrocarbon reserves and allows Mexico to maintain and increase oil production in the medium and long term.”

Trion is 8,333 feet (2,540 meters) deep and located 39 kilometers (24 miles) from the maritime border with the U.S. If the 10 billion barrels prove to be recoverable, the Perdido area would be the biggest discovery by Pemex since Cantarell, the world’s third-largest field when it was found in 1976.

No Crude

Pemex found no commercially viable deep-water crude in its first 22 attempts. The Mexico City-based company allocated 15 billion pesos ($1.1 billion) for this year’s deep-water projects.

Pemex expects to start producing sweet light oil from Trion in as soon as five years, Carlos Morales, Pemex’s head of exploration and production, said. Pemex invested $120 million in the Trion project, he said.

The company will get results in a month from another ultra- deep-water exploratory well called Supremus-1, which is 9,514 feet deep, Morales said. Supremus is also being drilled in the Perdido Fold Belt.

“This is one of the most important oil discoveries in deep waters” anywhere, Morales said.

Oil producers such as Royal Dutch Shell Plc, BP Plc and Chevron Corp. are already pumping crude from the U.S. side of the Perdido region, where the companies operate the world’s deepest spar production facility.

On Feb. 20, Mexico and the U.S. established a legal framework that created incentives for U.S. energy companies to develop oil and gas resources jointly with Pemex.

The accord helps to resolve issues such as whether oil extracted from the Mexican side of the Gulf but sent directly to crude terminals in the U.S. is considered Pemex output and imported crude, and whether Mexico will charge royalties on it.

-By Carlos Manuel Rodriguez and Nacha Cattan. Copyright 2012 Bloomberg
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