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Mexican government cancels onshore bidding round at Pemex’s behest
MEXICO’S National Hydrocarbons Com- mission, known by its Spanish acronym CNH, con rmed on June 13 that it had granted the national oil company Pemex’s request for the cancellation of a scheduled round of farm-out auctions in October.
e commission made its announcement shortly a er Reuters reported that Pemex had asked for the October bidding round to be called o . It did not comment on the reasons for its decision or say when the seven onshore contract areas might be o ered to private inves- tors again.
CNH had been slated to auction off joint-venture rights to the sites within the framework of a constitutional energy reform programme launched in 2013 by Enrique Pena Nieto, Mexico’s former president. But since the election of Nieto’s successor Andres Manuel Lopez Obrador last year, the farm-out pro- gramme has fallen out of favour.
Obrador has expressed deep scepticism of his predecessor’s plan to use auctions as a means to attract private-sector investment into Pemex, which is deeply in debt. Instead, he has argued that investment in downstream initiatives,
such as the US$8 billion Dos Bocas re nery project, will help the state-run company x its nances and reverse a 15-year downturn in oil production.
is is not the rst time the president has disrupted the auction process. Obrador can- celled two bidding rounds late last year, shortly a er taking o ce.
He also said at the same time that he was pushing the date of the farm-out auctions scheduled for February back to October.
Now those auctions, which covered seven contract areas in the states of Chiapas, Tabasco and Veracruz, have also been cancelled. According to o cial reserve estimates, those sites contained some 392 million barrels of oil equivalent in proven, probable and possible reserves as of June 2018, as well as 683 million boe in unrisked prospective reserves. ey are currently producing about 43,000 barrels per day of oil and 6.46 million cubic metres per day of natural gas.
CNH’s decision to cancel the October farm- out bidding process came shortly a er the Fitch ratings agency revealed that it was downgrad- ing Pemex’s bonds to “junk” status.™
COLOMBIA
Arrow reports commercial oil discovery at Tapir block in Colombia
CALGARY based Arrow Exploration Corp. has discovered commercial oil reserves at Tapir, a block located within the Llanos Basin in Colombia.
In a statement dated June 10, Arrow said it could con rm the discovery following the completion of its 11-day test production pro- gramme at the Rio Cravo Este-1 (RCE-1) well. During testing, it reported, RCE-1 yielded no natural gas but did produce crude oil with a spe- ci c gravity of 28.3 degrees API at a water cut of 46.5%. Output levels averaged 613 barrels per day and peaked at 1,172 bpd, it added.
The company went on to say that it had submitted the test results from RCE-1 to a contractor with the intent of obtaining an updated reserve estimate for Tapir. Arrow has not yet booked any reserves at the Colombian block, but this may change after DeGolyer
& MacNaughton reviews its data. The Dal- las-based consultancy is due to issue a reserve report by October 1.
Arrow spudded the RCE-1 well on April 25 and drilled it to a measured depth of 10,000 feet (3,048 metres). On May 15, it revealed that it had encountered 103 feet (31.4 metres) of net oil pay within the well, most of which fell within the C7, Gacheta and Ubaque formations. e testing programme targeted a 12-foot (3.7- metre) interval within the C7-A sand.
Jack Scott, Arrow’s chief operating o cer, described the discovery as a positive devel- opment for his company. “We’re very pleased with our RCE-1 test results,” he said. “Arrow has now gone two for two on exploration wells since forming the company with our success on Danes-1 late last year and current success on RCE-1.”
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