This report on activities of AAPG's Latin American Region
was prepared by Alfredo E. Guzmán, the region's president and subdirector
for all E&P operations of the North Region for Pemex.
This column is devoted to international items of note to the AAPG.
News items, press releases and other information should be submitted
to the EXPLORER/International Bulletin Board, P.O. Box 979, Tulsa, Okla.
74101; telephone – 918-560-2616; fax – 918-560-2684; or e-mail – firstname.lastname@example.org.
Bulletin Board Archives
Exploring and producing oil and gas in Latin
America today can be a very exciting and rewarding business.
Mexico, from being the only hydrocarbon producing country
of the world where private investment was not allowed, is starting,
if timidly, to open up under the Multiple Service Contracts concept
for gas production in the northeastern Sabinas and Burgos basins of
the Gulf Coast (see
This incipient effort, although not fully satisfying
to many companies due to the constitutional limitation that precludes
the booking of reserves by private firms, is nevertheless a big step.
In its first phase, important organizations like Repsol from Spain,
Petrobras from Brazil, Tecpetrol from Argentina and Lewis from San Antonio
signed 20-year agreements amounting to more than $4 billion to extract,
eventually, one bcf per day from sub-exploited tertiary plays.
Proof that these plays are not mature is the amount of
wells that have been drilled south of the border -- 5,000, from which
eight tcfs have been extracted, versus the more than 80,000 in the U.S.
counterpart of South Texas Railroad Commission District lV, which have
produced almost 70 tcfs from the same formations.
Following a second and perhaps a third round in the Burgos
and Sabinas, the concept most likely will be applied in 2005 in the
offshore of central Veracruz for dry non-associated gas, and in the
Chicontepec for oil. That play is similar to West Texas' Spraberry --
but that contains more than ten times the OOIP of the latter.
Meanwhile the Mexican government's executive branch will
continue pushing a congress dominated by the opposition to have the
legal framework changed to make it more consistent with the ways industry
works around the world. That means, allowing production sharing agreements
or strategic alliances of the Mexican national oil company with major
international enterprises, which would take place once companies are
able to share in the upside.
The one area that is requiring these changes in a great
degree -- and that eventually will surely see the participation of international
companies -- is the GOM deepwater region. The government of Mexico lacks
the resources to invest heavily in the search and eventual development
of the hydrocarbons of this frontier basin, and Pemex has neither the
experience nor the technology to do it -- reasons that will put the
pressure for a change in the legal framework.
Further south of the border all kinds of opportunities
are being made real, both onshore and offshore. This includes deep waters
in countries like Trinidad, Venezuela, Colombia, Brazil, Argentina,
Perú, Bolivia and some Central American nations.
The list includes even Cuba, with exploration and production
being carried by private and national oil companies accordingly to the
way it is done in the rest of the world.
Don't forget about three upcoming international meetings