Making the one Gulf dream a reality

Ever since Mexico’s historic energy reform in 2013, the idea of being able to approach the Gulf of Mexico (GoM) as ‘one Gulf’ has been a tantalising prospect for the governments, operators and contractors on both sides of the border. With at least 50bn barrels of recoverable resources left across the Gulf, it is not hard to see why.

We are already seeing the benefits of collaboration in Mexico’s shallow water, with a consortium of Mexico’s Sierra Oil & Gas, the US’ Talos Energy and the UK’s Premier Oil making the Zama discovery. Holding up to 2bn barrels, Zama has been described as one of the largest shallow water finds in the past two decades.

To date, Pemex has not entered the deepwater on its side of the GoM in any meaningful way; with such an abundance of oil closer to the shoreline, it has not really needed to. However, with Mexican oil production at a low ebb, and stiff regional competition from the Permian Basin, Brazil’s pre-salt and now Guyana, GoM producers have to make the most of the resources they have at hand.

More than 3,000 deepwater fields have been developed in the US Gulf, some of which are now reaching maturity. With operators and contractors looking for new destinations for their crews, where better than the Mexican side of the Gulf, where only 50 or so deepwater fields have been developed? The similar geology should make it a relatively easy crossover technically, and given the data sets we have seen, a safe exploration and production investment, too.

The Mexican GoM would benefit from 20 years of US GoM deepwater drilling and production experience, as well as the efficiencies and cost savings that could be brought about by the joint development of multiple plays and shared assets and infrastructure.

While both parts of the GoM share similar geology, regulations, procurement and procedures on either side of the Gulf are quite different. However, doing business across the Gulf is something the EIC is well positioned to help with.

Our North America HQ is located at the heart of Houston’s Energy Corridor, with office facilities available for rent. We also know just about everyone in the area, be it operators or Tier 1, 2 or 3 contractors, as well as all the chambers of commerce and governmental bodies.

Recently, we held our first ever EIC Connect event in Mexico City, bringing one of the largest ever delegations of UK companies working in the energy sector to Mexico in order to meet buyers and procurement specialists from a range of Mexican companies active in the Gulf.

So, for those of you thinking about making the most of opportunities on both sides of the border, make sure you visit the EIC on stand 1539 at OTC or contact us by email at houston@the-eic.com to find out how we can help your business grow. 

Canada

A lease sale for acreage offshore the province of Newfoundland and Labrador resulted in record high bids, totalling US$992m over five blocks. A partnership between Suncor Energy and Husky Energy, as well as majors BHP and Equinor, will develop the sites. Other major offshore developments include Equinor and Husky Energy’s US$4.98bn Core Bay du Nord in the Flemish Pass Basin and ExxonMobil’s US$3.5bn Hebron Pool 3 phase 1 subsea tie-back. Onshore developments make up the bulk of planned CAPEX – EICDataStream is currently tracking US$79.3bn of planned projects in the Alberta oil sands region, including Teck Resources’ 74,000bbl/d Frontier Oil Sands Mine project phases 1 and 2.

The US

The US GoM has weathered the oil downturn and competition from other prolific oil provinces and continues to attract capital-intensive projects from leading IOCs. Shell is pushing forward with the US$3bn Vito oil field, while BP is on track to start production from the US$9bn Mad Dog phase 2 in 2021. Key projects in the pre-FEED/FEED stage include Chevron’s Anchor and Total’s North Platte discoveries. The Gulf’s extensive oil and gas infrastructure has also motivated the maximisation of existing assets: BP has recently sanctioned a US$1.3bn expansion of the Atlantis field, awarding an EPI contract to TechnipFMC in January 2019.

Mexico

Oil production in Mexico continues to decline. Pemex reported record low production rates of 1.62MMbbl/d of oil and 3.70Bcf/d of gas in January 2019; a 15% and 8.9% year-to-year decrease, respectively. The Mexican government plans to increase oil and natural gas production despite budgetary constraints and the suspension of onshore bidding rounds 3.2 and 3.3. BHP Billiton has increased its planned investment in the Trion field by US$256m, allowing for an additional appraisal well. Eni has taken an FID on its US$2bn Area 1 development. Pemex has also reported plans to develop a series of 20 new oil and gas discoveries onshore and offshore at Campeche and Tabasco.

Trinidad and Tobago

The Caribbean country is set to remain a leading oil and gas market in the North America region, following a commitment by oil majors to invest up to US$10bn in the country during the next five years. BP, one of the most active IOCs in Trinidad, has recently brought onstream a gas platform at the Angelin gas field, which will supply gas to the Atlantic LNG facility. The operator is currently making progress with the Cassia C and Matapal offshore gas projects, which received FIDs in December 2018. BHP, meanwhile, is working on the Ruby-Delaware offshore gas project, with an FID expected in the second half of 2019.

Looking to expand into North America?

The EIC can help For those of you thinking about doing business in the US, please get in touch with the EIC Houston team (houston@the-eic.com) about its EICLaunchPad service, which provides a low-cost, low-risk entry into this market.

Located in the heart of Houston’s Energy Corridor, we can provide 
you with serviced office facilities, meeting rooms and hot desks, as well as a virtual office service: everything you need to start building your business in the region.

Visit the EIC-hosted UK pavilion

Please take the time to visit the exhibitors on the UK pavilion in Hall D to find out how their innovative products and services can add real value to your projects and programmes.

Design, engineering and consultancy

BMT International
Clarksons Research
Fluorocarbon
Griffin-Woodhouse
Heatric
Linear Composites

Hazardous area and safety equipment

ABTECH
E2S
HMi Elements
Orga
Pyroban
Raytec
Rota Engineering
Survitec Group
The Monobuoy Company

Instrumentation and control

Advanced Sensors
HTL Group
IMI Precision Engineering

Logistics and load handling

ACE Winches
ALE
Bridon International
UTC Overseas

Specialist technology providers

Balmoral Offshore Engineering
Barton Firtop Engineering
Bodycote Surface Technology
Castrol Offshore
Colson X-Cel
CRC–Evans Pipeline International
Cutting & Wear
Ducab UK
Evoqua Water Technologies
FoundOcean
Hilti
Noralis
Osbit
PEI Genesis
Peppers Cable Glands
Pharos Marine Automatic Power
PJ Valves
Techfluid
Veolia
Whitford

Image credit | Shutterstock