Mexico’s energy regulator CNH has approved an amended plan submitted by China Offshore Oil Corporation (CNOOC) for exploratory wells, which could see the company move toward production from deep offshore waters by 2021.

Part of the assignment CNH-R01-L04-A1.CPP/2016, the CNOOC field is a 1,678m2 area that lies in waters between 1,000-3,000m deep (noted in red below). Beyond meeting its obligatory work commitments at the assignment, CNOOC aims to move more quickly toward production.

Source: CNH

“The objective of the modification is to evaluate the oil potential, in particular of the Wilcox Formation, which is the most promising reserve in this part of the Perdido Fold Belt, and the drilling of at least two wells,” said CNH technical supervisor Rodrigo Hernández Ordoñez.

Though Mexico currently has no operating wells in its deep offshore waters, Shell is set to drill two exploratory wells in its deepwater assignment in 1H2020.

CNOOC’s assignment has regular activities nearby, including work at an assignment being developed jointly by Pemex and BHP Group, known as the Trion project.

It lies about 150km off the coast of Tamaulipas state and only 6km from the maritime border with the US.

So far, 13 seismic 3D studies, both geological and integrated, have been conducted across the region, and another eight are currently being carried out.

AMEYALI-1EXP AND SUBSEQUENT PLANS

CNOOC’s plan is contingent on the findings from its first exploratory well, Ameyali-1EXP, which it plans to drill in April-July this year, under its modified plan. What it finds will lead it to pursue one of three scenarios.

Source: CNH

Should Ameyali-1EXP show a promising amount of oil, CNOOC would undertake a process of evaluation through 2020 with the goal of drilling a delimiter well, Ameyali-1DEL, next year.

If Ameyali-1EXP turns up oil but it appears to be insufficient to be commercially viable on its own, CNOOC would likely pursue drilling a second exploratory well in adjacent areas about 5km away. These follow-on wells would be either Ameyali Sur-1EXP, to the southwest of the first well or it might drill Tlami-1EXP in an area to the east.

In a third option, CNOOC could drill both Ameyali-1EXP and then Ameyali Sur-1EXP before making a decision to begin drilling a delimiter well only toward 2022.

Regardless of the wells drilled or the drilling sequence, the operator intends to continue with geochemical and integrated seismic studies, which it launched in 2019 and will continue conducting through February of 2022.

“They are maintaining the earlier name,” Ordoñez explained of the Amayeli development plan, “However, this is a new prospect. It's not the same prospect that it had in the earlier plan.”

Under the modified plan, CNOOC is using the Amayeli name but focusing its first exploratory well in a sub-salt part of the Wilcox Formation that is in waters about 1,750m deep. Drilling would reach a depth of 6813m.

POINTING TOWARD FUTURE DEEPWATER DEVELOPMENT

The increased activity at the assignment equates to a rise in cost for CNOOC of over US$107mn this year, resulting in total investment of over US$339mn at the site by 2022.

Of that sum, the lion’s share of over US$104mn for 2020 would go toward well drilling, followed by another US$129mn for well drilling next year.

Though an enormous sum for drilling exploratory wells, costs escalate in proportion to the depth of the well.

Currently, Shell is drilling the ultra-deepwater Chibu-1EXP well at an expected cost of more than US$93mn and, just days ago, it received CNH approval for another exploratory well in ultra-deep waters, to be drilled from March-June at a cost of at least US$84mn.

Meanwhile, in an extensive, but as yet untapped area, CNOOC’s plan could point the way toward further development of the region.

“In the event of commercial success,” Ordoñez said, “the activities in the present contract could collaborate to establish a development hub in the Perdido area, together with other projects like Trion.”