Pemex oil platform "Ku Maloob Zaap" in the Bay of Campeche, Mexico, April 19 2013. REUTERS / Victor Ruiz García/File Photo

Pemex Uses Nitrogen In Hopes To Resume Oil Output After Major Fire

Bloomberg
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August 27, 2021

By Amy Stillman (Bloomberg) Petroleos Mexicanos is resorting to nitrogen injections into offshore oil wells to quickly restore output following a major platform fire, a measure that could create complications down the line. 

Under pressure to meet an ambitious goal of restoring full production by Monday, the company is using nitrogen to push oil out of wells because natural gas output was knocked offline after the blast, according to people with knowledge of the situation, who asked not to be named because they’re not allowed to speak for the company. 

The problem with the short-term fix is that nitrogen also disperses oil inside the reservoirs into several pockets, making exploration not only more difficult but also more expensive in the long term, one person said. Natural gas is usually used instead to create enough pressure to allow oil to flow out of wells.

A Pemex representative didn’t immediately respond to a request for comment.

The beleaguered Mexican state driller lost a quarter of its output on Sunday due to the explosion, putting at risk a government goal of reversing a decade and a half of oil production declines. Holders of debt issued by Pemex are betting that the government will step in to help out the company if needed. 

Mexican President Andres Manuel Lopez Obrador said Thursday that the country will accomplish its crude output plans and end 2021 with a daily average production of 1.8 million barrels a day. Pemex’s Chief Executive Officer Octavio Romero Oropeza also announced on Tuesday evening that the company had restored a sixth of the lost volume. 

Pemex lost 421,000 barrels of crude a day on Sunday due to a deadly explosion at its E-Ku-A2 offshore platform — part of a gas processing center connecting to Ku-Maloob-Zaap, one of Pemex’s biggest oil field clusters in the Gulf of Mexico. The Ku-Maloob-Zaap field cluster also produces about 16% of the country’s natural gas. 

In the early 2000s, Pemex used nitrogen injection to aggressively boost output at Cantarell, and some blame the megafield’s rapid decline partially on that process.

By Amy Stillman and Lucia Kassai © 2021 Bloomberg L.P.

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