Chicontepec Formation

Chicontepec Formation
Country	Mexico
Region	Veracruz Puebla Hidalgo
Operator(s)	Pemex
Field history
Discovery	1926
Production
Estimated oil in place	139,000 million barrels (~1.90×10^10 t)
Recoverable oil	19,000 million barrels (~2.6×10^9 t)

The Chicontepec Basin (Chicontepec Formation) is a petroleum system in Mexico north-east of Mexico City, covering an area of around 3,800 square kilometres (1,500 sq mi) in the states of Veracruz, Puebla and Hidalgo. Several oil fields have been discovered in that area since 1926. A major field was discovered in 1973 but contains extra heavy crude^{[dubious – discuss]}, which due to special refining needs is considered unviable at this time. Since that time, tiny amounts of oil have been produced.^[1] While the reserves are overwhelmingly extra heavy crude, pockets of lighter tight oil, as well as natural gas, are also found in the basin.^[2]

Overview

Chicontepec Basin contains Mexico's largest certified hydrocarbon reserve, totaling more than 19 billion barrels (3.0×10^⁹ m³) of oil equivalent with original oil in place of over 139 billion barrels (22.1×10^⁹ m³) of oil equivalent; recovery is complicated by challenging, low recovery rate reservoirs, but is made more attractive due to the presence of light and super-light crude oil. [1]. In 2003, PEMEX said it could take total investment of $30 billion over 15 years to fully develop Mexico's oil and gas reserves in the Chicontepec Basin. The project would require drilling 13,500 wells in the basin, much more than the total number of oil wells now producing in the country.^[3] This situation is interesting as the oil wells would be numerous and small. It would be necessary to get permission to drill from the communities that these wells would be in. Fortunes might be made by private firms in the pre-exploratory negotiating phase.

In addition to being economically and technically challenging, the basin's development also faces political difficulty, because the areas overlapping it are quite densely populated,^[4] including by Native Americans like the Otomi tribe. Despite these difficulties, Pemex urgently needs production from Chicontepec to offset the rapid production decline in its main offshore field, Cantarell.

In February 2009, the certified reserves of Chicontepec Field were comparable with half of those in Saudi Arabia with 1139 billion barrels (22.1×10^⁹ m³), which puts Mexico at the third place of the countries with most oil reserves after Arabia and Canada, yet, Mexico lacks the technology to exploit those reserves.^[5]

Attempts at increasing output

In March 2006, Mexican President Vicente Fox announced that Pemex would be investing $37.5 billion US dollars over the next 20 years on the oil fields of Chicontepec. It is hoped that this will boost the fields' output to 1 million barrels per day (160×10^³ m³/d). Pemex's chief executive estimates that 20,000 wells are to be drilled in order to exploit this field.

Intensive drilling has taken place in Chicontepec in recent years, starting with a contract for 500 new wells offered in December 2008.^[6] However, results in terms of output have been disappointing, with the field still yielding a modest 46,000 barrels per day (7,300 m³/d) in the 3rd Quarter of 2010.^[7]

See also

• Petroleum industry in Mexico

References

1. ^ About 2500 b/d in 2002 according to^{[dead link]}
2. ^ World oil, Nov. 2001 Vol. 222 No 11
3. ^ Sergio Solache, 17 February 2007, Arizona Republic, claims that "Pemex now has more than 5,000 wells in production"
4. ^ Gov´t strives to save oil field - El Universal - Mexico News
5. ^ http://www.eluniversal.com.mx/notas/577412.html
6. ^ Mexico seeks bids for 500 Chicontepec oil wells
7. ^ Pemex: Crude Output Increase for 2011 on New Contracts