Mexican national Pemex will pump an additional US$6 billion into its beleaguered Cantarell oilfield to maintain its current production levels, Reuters has reported.
The heavy oilfield, located about 80km off Ciudad del Carmen in the Bay of Campeche, which is home to most of Mexico’s oil production. Comprised of several fields, including Nohoch, Ixtoc, Kutz, Chac, and Akal, Cantarell (pictured) was the largest offshore development in the world at the time of its discovery in 1976. The discovery put Mexico on the map in terms of oil production, and cemented the ties between Mexican cultural identity, Pemex, and oil industry.
Production, however, has been on a steady decline, despite Pemex’s intervention attempts. Cantarell produced 440,000bod of crude in 2013, nearly 80% below its 2004 peak of 2.1MMbod, according to the US Energy Information Administration.
Nonetheless, Pemex is not ready to give up on the aging asset.“Cantarell continues to be a good producer,” Gustavo Hernández García, director general of Pemex Exploration and Production said while speaking at PECOM in April. “It’s our second largest producer, nationally.” Mexico’s top crude producer is the Ku-Maloob-Zaap formation, Cantarell’s neighbor in the Bay of Campeche.
The sizable investment aims to produce additional 100,000bpd through secondary recovery over the course of a decade to counteract Cantarell’s decline, Miguel Angel Lozada, Pemex's Cantarell administrator, told Reuters. Lozada singled out Akal in particular, saying that it would “be stabilized” as part of the plan.
After Mexico’s historic energy reforms, Pemex is waiting to learn the results of the energy ministry’s Round Zero allocation after submitting its wish list of fields it would like to keep. Results should be announced in September.
As a result of the energy reform and its proposed changes, Moody's Investor Services upgraded the Mexican national's credit rating to A3, Pemex announced in June.