COMMENTS EDITORIAL COMMITTEE

Syed Ali—Chairperson, Technical Advisor,

Schlumberger
Francisco J. Alhanati, Director, Exploration &
Production, C-FER Technologies
Mohammed Azeemuddin, Geomechanics and Pore

Mexico’s Oil Reform

Pressure Team Lead, Chevron
Baojun Bai, Associate Professor/Graduate Coordinate
Petroleum Engineering, Missouri University of Science
and Technology
Ian G. Ball, Technical Director, Intecsea (UK)
John Donnelly, JPT Editor Luciane Bonet, Reservoir Engineering Manager,
Petrobras America
Paul D. Cameron, Senior Well Intervention Discipline
Advisor, BP plc
Momentum appears to be growing for a proposal that would
Robert B. Carpenter, Sr. Advisor–Cementing,
more fully open Mexico to outside oil and gas investment. The Chevron
Simon Chipperfield, Team Leader Central Gas Team/
move could offer attractive upstream opportunities to opera- Gas Exploitation, Eastern Australia Development,
Santos
tors and the service sector, and intends to rescue Mexico’s
Gerald R. Coulter, President,
steeply declining production. Coulter Energy International
Martin V. Crick, Chief Petroleum Engineer,
The proposal by Mexican President Enrique Peña Nieto Tullow Oil plc
lacks critical details for investors and is politically controver- Jose C. Cunha, Drilling Manager, Ecopetrol America.
Alexandre Emerick, Reservoir Engineer,
sial, but it marks the most significant step to loosen restrictions on foreign invest- Petrobras Research Center
Martyn J. Fear, General Manager – Drilling &
ment in decades. Mexico nationalized its oil industry in 1938, and its constitution Completions,Husky Energy
states that ownership of natural resources belongs solely to Mexico. Oil production Niall Fleming, Leading Advisor Well Productivity &
Stimulation, Statoil
and reserves have been falling sharply, however, and now pose a threat to the coun- Emmanuel Garland, Special Advisor to the
HSE Vice President, Total
try’s economic health. The proposed reform addresses the downstream as well as A.G. Guzman-Garcia, Engineer Advisor,
power sectors, but the changes designed for the upstream are the most contentious. ExxonMobil
Robert Harrison, Global Technical Head of Reservoir
Although Mexico is the 10th largest oil producer in the world, its output last Engineering, Senergy Oil & Gas
year of 2.6 million BOPD represents a 20% decline since 2002. In July, oil production Delores J. Hinkle, Director, Corporate Reserves,
Marathon
dipped to its lowest level since 1995. Aging oil fields and underinvestment have con- George W. Hobbs, Director, Strategic Chemistry
John Hudson, Senior Production Engineer, Shell
tributed to the fall, as the government leans heavily on state oil company Pemex for Gerd Kleemeyer, Head Integrated Geophysical
revenue that a private company likely would reinvest in oil infrastructure. The once Services, Shell Global Solutions International BV
Gregory Kubala, Global Chemistry Metier Manager,
prolific Cantarell field, the world’s third largest when it was discovered in 1976, pro- Schlumberger
duced 400,000 BOPD in July, compared with a peak of 2.3 million BOPD in 2003. The Jesse C. Lee, Chemistry Technology Manager,
Schlumberger
new proposal argues that the oil sector needs additional investment, technology, and Cam Matthews, Director, New Technology Ventures,
C-FER Technologies
expertise to fully exploit promising deepwater and shale opportunities. Casey McDonough, Drilling Engineer,
The proposal would allow the government to offer profit sharing to private oper- Chesapeake Energy
Stephane Menand, Managing Director,
ators. However, it is unclear whether operators would be allowed to book reserves, DrillScan US
John Misselbrook, Senior Advisor for Coiled Tubing,
which could be a deal breaker. A foreign company’s share would be based on a per- Baker Hughes
centage of production relative to the oil price. Badrul H Mohamed Jan, Lecturer/Researcher,
University of Malaya
The president contends that his plan would increase oil production from the Alvaro F. Negrao, Senior Drilling Advisor,
Woodside Energy (USA)
current 2.5 million BOPD to 3 million BOPD by 2018 and 3.5 million BOPD by 2025. Shauna G. Noonan, Staff Production Engineer,
Of particular interest is exploration in the deepwater Gulf of Mexico, where most of ConocoPhillips
Karen E. Olson, Completion Expert,
the country’s future oil potential appears to lie, which represents both financial and Southwestern Energy
Michael L. Payne, Senior Advisor, BP plc
technical challenges, and northern Mexico, where shale basins contain an estimated
Mauricio P. Rebelo, Technical Services Manager,
60 billion BOE. The shale basins are just south of the Eagle Ford Shale development Petrobras America
John D. Rogers, Vice President of Operations,
in south Texas, which has contributed to the “shale revolution” in the United States. Fusion Petroleum Technologies
Oil nationalism in Latin America runs strong. But Brazil state oil company Jon Ruszka, Drilling Manager,
Baker Hughes (Africa Region)
­Petrobras blossomed after it was partially privatized in 1997. After it opened its oil Hisham N. Saadawi, VP Engineering,
ADCO (Abu Dhabi Co. Onshore Oil Opn.)
sector to private participation, Brazil went from a net oil importer to self-­sufficiency Jacques B. Salies, Drilling Manager,
in just a few years and production rose from under 1 million BOPD to the current Queiroz Galvão E&P
Helio M. Santos, President, Safekick
2.4 million BOPD. Its recent pre-salt discoveries may enhance its output significantly. Otto L. Santos, Sênior Consultor, Petrobras
The development of those resources could propel Brazil into the league of the world’s Luigi A Saputelli, Senior Production Modeling
Advisor, Hess Corporation
largest oil exporters. JPT Brian Skeels, Emerging Technologies Manager,
FMC Technologies
Sally A. Thomas, Principal Engineer, Production
Technology, ConocoPhillips
Win Thornton Global Projects Organization,
BP plc
Erik Vikane Manager Petroleum Technology, Statoil
Scott Wilson, Senior Vice President,
To contact JPT’s editor, email jdonnelly@spe.org. Ryder Scott Company

18 JPT • OCTOBER 2013

CommentsOct.indd 18 9/13/13 1:15 PM