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Petroleum History of Mexico: How it Got to Where it is Today*

Alfredo E. Guzmn1
Search and Discovery Article #10530 (2013)**
Posted October 21, 2013
*Adapted from oral presentation at AAPG 2013 International Conference & Exhibition, September 8-11, 2013
**AAPG2013 Serial rights given by author. For all other rights contact author directly.
1

Altamira Petroleum Company, Poza Rica, Veracruz, Mexico (alfredoeguzman@gmail.com)

Abstract
Mexico has five major hydrocarbons-producing provinces: two for oil, the Southeast and the TampicoMisantla basins; and three for gas, the
Sabinas, Burgos, and Veracruz basins. It has seven other provinces with potential: California, Gulf of Cortes, Chihuahua, Sierra Madre Oriental,
Sierra de Chiapas, Progreso Shelf, and the Deep Gulf of Mexico. Nevertheless, despite this natural-rich endowment, Mexico is the only country
in the world among those considered to be oil-rich that has consistently lost production and reserves in the last ten years.
Many reasons can be attributed for these results, and as this article proves, the least of them is the country`s endowment of oil and gas
resources. The explanation can be found in the petroleum history of Mexico. Since 1938 the country has had only one oil company responsible
for all of its upstream activities. Even though Pemex`s performance is comparable with that of most of the majors, it is impossible that all the
remnant potential of the whole country can be found and produced through only one company, no matter how large, wealthy, efficient,
technologically advanced, and successful it can be.
The understanding of the petroleum history of Mexico helps explain why the country is so unexplored and undeveloped. Significant historical
aspects/features/events have been:
the legal frame, that up to now has precluded third party-participation outside of Pemex`s in the exploration activities of Mexico;
the discovery of the supergiant onshore Mesozoic ChiapasTabasco and offshore Gulf of Campeche provinces in the 1970`s, that took
Pemex to concentrate all its resources in the development of the Southeast basin;
the historically allocated Capex for E&P, that has been totally insufficient to allow a systematic exploration and development of the
country`s potential; and
the exploration activities that have focused mostly in low-risk, extension opportunities with little expenditures allocated to test rank
wildcat ones.

The results of these policies are complete basins / provinces / plays with tremendous potential untested for all practical reasons. The history, as
it is being written today, allows for optimism as the country is being opened-up for third-party participation in the upstream, which will allow
for spectacular results.

The Petroleum History of


Mxico
How it Got to Where it is Today
Alfredo E. Guzmn
Cartagena de Indias, Colombia
Sept. 2013

The Petroleum History of Mxico

Some background
Evolution of the E&P sector
Today and the future
Closing remarks

Some background: Mxico`s oil and gas basins


Gulf of
Corts

California
Basins

Chihuahua

Sabinas
Burgos

Chicontepec

6 producing basins
6 with potential.
No oil or gas yet
produced from the
deep GoM

Deep

Sierra
GoM
Madre
Oriental Tampico
Misantla

Veracruz

Sureste
Gas Oil

Yucatan
Shelf
Macuspana

Sierra de
Chiapas

Oil and Gas historically discovered in Mxico


OIL
(bb)

GAS
(tcf)

Discovered
(OIP)

263.32

100%

279.47

100%

Produced

40.62

15.42%

71.59

25.61%

Reserves
(3P)

30.82

11.70%

63.23

22.62%

Remnant

191.88

72.87%

144.65

51.77%

Source: National Hydrocarbon Commission

Evolution of the Petroleum Industry in Mexico


The Syndrome of the Bitten Apple

A. Lajous

What next, Deep Water?

bano Pnuco 1904


North Golden Lane 1908

Poza Rica
1930

K & J fields

Tertiary
fields

Offshore
Campeche 1976

Chiapas Tabasco 1974


1940`s , 50s & 60`s

First Commercial Oil, April 1904


bano Pnuco Province, Tampico Basin
Production
History
BOD

Northern Golden Lane, 1908


San Diego
de la Mar-3

At the time
this model
was not
understood

Northern
Golden
Lane
prodn.

bano
Panuco
production

Tertiary

UK

Mid K
LK
1

Jr

Basement

seg
0

10

20 km

Pozo Cerro Azul 4


260 MBOD

Northern Golden Lane, 1908


Pozo

Ao

BOD

Cerro Azul-4

1916

260,000

Potrero del
Llano-4

1910

115,000

San Diego
de la Mar-3

1908

80,000

Juan
Casiano-7

1910

72,000

lamo-2

1920

45,000

Juan Casiano - 7

Cerro Azul No. 4,

The San Diego de la Mar N3 well blew up


and flowed through two branches creating
a crater half a km in diameter

2 KM
San Diego de la Mar- 3 (Dos Bocas)

Poza Rica Field, 1930


One of the largest stratigraphic traps in the world in carbonate rocks

Production history
200
175
150
125
100
75
50
25
0
35

40

45

50

55

60

65

70

75

80

85

90

95

'00

Source Pemex

Poza Rica-2
discovery
well

Mxicos production
depended on the Poza
Rica field for 30 years

The 1950 through the 1970s


Important fields were discovered in the Upper Jurasic and Middle Cretaceous
of the Tampico - Misantla Basin and the Tertiary of the Sureste Basin
Js. Arenque
Js. Tamaulipas
Js. San Andrs
K. Faja de Oro North
K. Faja de Oro South
UK sedimentario model

UJ sedimentario Model

Ogarrio
Cinco Presidentes
Snchez Magallanes
Source Pemex

The Mesozoic in the Sureste Basin, 1970s


In 1972 the Mesozoic carbonates underlying the Tertiary siliciclastics were
reached discovering the giant accumulations of the Chiapas -Tabasco province
and in 1976 the mega-offshore Campeche province was proven successfully.

Mesozoic oil
Chac

Tertiary oil
Tertiary gas

Cinco Presidentes

Cactus-Sitio Grande

Source Pemex

What the discoveries in the Mesozoic meant


Reserves increased more than 65 BBO and production
more than 2 MMBOD in less than 10 years.
MBOD

BBOE

72.5

Source: National Hydrocarbon Commission

The exploratory drilling reflects the investment


180
160

4844 exploratory wells 1938 - 2009

140
120
100

80
60
40
20

1938
1940
1942
1944
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008

Source: National Hydrocarbon Commission

Development wells drilled 1960 - 2010


There was also a drop in the activity in part due to the high productivity of the
Mesozoic wells

18,030 wells 1960 - 2008


24,365 total
1,627 producers

Source:. Dr. G. Dominguez, PEMEX publications

The History After the Big Discoveries


MBOD 3500

Cantarell
decline

N2 injection

3000

2500
2000

Offshore
Campeche

1500

1000
Chiapas-Tabasco

500

0
1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

BBOE
72.5

45.8

43.5

16.0
4.79

6.33

Source: National Hydrocarbon Commission

What is next
The future is dependent on the approval of a proposed
Energy Reform Bill by the Mexican Congress.
Mxicos strategy is based on:

Deep water exploration (and development)


Chicontepec development
Unconventionals (Shale gas and (tight) oil)
Optimization of mature fields
Exploration of traditional areas

Deep Waters
Half a million km, Pemex calculates a potential of 30 BBOE

Reynosa
1

Cinturn
Subsalino

Tampico

Cinturn
Plegado
Perdido

Cordilleras
Mexicanas

Cinturn
Plegado Provincia
Poza Rica
Catemaco Salina del
Golfo
Veracruz

0
Cd. Carmen

100 200 300


kilmetros

Source: Pemex

The Perdido Fold Belt


Trion 1, best discovery in Mexican side of the the deep GoM

Source: Pemex

Unconventionals, Shale gas and oil


The EIA considers the potential for shale gas in Mxico to be
545 TCF and the shale oil to be in the order of 13 BBO
Main plays:
OIL

WET
GAS
DRY
GAS

The Eagle Ford,


continues extensively in
Mxico with same
characteristics it has in
South Texas
The Paleozoic of
Northern Mxico
The Upper Jurassic of
the Gulf Coast
Source Pemex

Chicontepec Paleocanyon
It holds 38% of all the reserves of Mxico. Its development
requires unconventional technologies as it is mostly tight oil
OOIP:
OGIP:
3P Reserves:

Cum
production:

81,492 MMB
39,756 MMMCF
10,715 MMB
27,636 MMMCF

230 MMBO
424 BCF

(13%)
(70%)

(0.2%)
(1.0%)

Thrust belt

reef
Source Pemex

The History of Dry Gas


The Dry Gas Basins that have been discovered in Mxico are:

Burgos (1945) and Sabinas (1976) basins


1,400
MMcfd

16 0 0
14 0 0

Sabinas
contribution

12 0 0
10 0 0
800

180
160
140
120
100
80
60

600

40
20
0
77

82

87

92

97

'02

400
200
0

19 4 5

50

55

60

65

19 7 0

75

80

85

19 9 0

95

2000

Veracruz Basin, 1953

05

1,000
MMcfd

1000
900
800
700
600
500
400
300
200
100
0
1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Source Pemex

The History of Dry Gas


The two other Dry Gas Basins are:

Macuspana, Sureste Basin, 1905

800

800

600

600

400

400

200

200

0 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 0

Offshore Veracruz Basin, Lankahuasa field, 2002

Source Pemex

The Future
Pemex expects to bring production to 3 MMBOD, but the output will
depend on the legal reform presented to Congress.
MBOD

3,000

Source Pemex

Closing Remarks

Mexico has a very rich history regarding the search and


extraction of its oil and gas.

The volumes produced compared to those found are


not what they should be.

This is in part the result of what has been called the


Bitten Apple syndrome.

But also because insufficient participation of third


parties which has limited the countrys potential.

There is a huge number of opportunities for the E&P for


oil and gas.

For these to be made real, a legal reform was presented


to the Mexican Congress.

Mxico has enough oil and gas to write another 100


years of history.

Thank you!