Pemex struggles to remain in the ranks of oil exporters

…Mexican oil production is delining 9%/year which, if continued, will end exports in six years. Chicontepec forms a main part of the strategy to bring oil production back above 3 million bbl/day by 2015. In that year, Chicontepec will be producing 511,000 bl/day. Many observers think it will be difficult to meet this schedule. A Chicontepec well will currently produce only a few hundred bbl/day. even with steady drilling, the area now produces only 72,000 bbl/day.



Analysis: The three projects taken together will require 1,170 wells. To obtain 511,000 bbl/day by 2015 means that each well will have to produce 440 bbl/day. With modern technology which will include horizontal drilling, fracturing, propping the fractures open and then installing water drive, 440 bbl/day is not an impossible task. The major unanswered question is how much will the development cost on a per/barrel basis.

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