Integrated E&P Contracts. May 2013

Transcription

1 Integrated E&P Contracts May 2013

2 Oil Production Oil production MBD Incremental production w/o Cantarell MBD 3,500 3,000 2,500 2,000 1,500 1, Cantarell Other fields Cantarell, one of the world s largest offshore oil fields, provided Mexico with a significant production base. In 2003, it reached its peak production of 2.2 mmbd. As Cantarell entered its depletion stage, Pemex developed other important projects, which today contribute to 900 mbd of new oil. 2

3 Mexico s Hydrocarbon Resources Prospective resources 3P reserves* Cumulative production 28.4 Sureste Southeast Tampico Misantla Burgos Veracruz 1 2 Deep water 1 27 Shale 60 Total * Billion barrels of oil equivalent as of January 1, 2012 The IEA estimates that Mexico s shale resources could reach 681 bcf, the fourth largest reserves worldwide. Pemex has identified five provinces with shale potential. 3

4 Cumulative NPV Matured Fields Extra heavy oil Chicontepec Deepwater Gas Investment Portfolio & Integrated E&P Contracts Pemex Project Portfolio (Million dollars) Execution Limit Cumulative PVI Integrated EP contracts 4,000 3,500 3,000 2,500 2,000 1,500 1, Production Forecast MBD Additional Capacity Base st Round Brown fields Onshore Southern Region 2 nd Round Brown fields Onshore & Offshore (sh wt) Northern Region 3 rd Round Chicontepec unconventional 4 th Round Extra Heavy Oil Offshore (shallow water) 5 th Round Deep water 6 th Round Shale oil & gas 4

5 Integrated E&P Contracts: First and Second Rounds 2011: Three contracts for brownfields in Tabasco. 2012: Six contracts for brownfields in Veracruz. The first two rounds of Integrated EP Contracts account for $4 billion dollars of investment in the first six years. Production is expected to reach at least 150 mbd towards In total, 30 companies participated in both bid rounds. 5

6 Third Round: Chicontepec Chicontepec is located in the States of Puebla and Veracruz, in the Gulf coastal plain. Chicontepec holds 33% of Mexico s total reserves and mostly unconventional resources. The six blocks account for than 3,195 mmboe in 3P reserves and prospective resources of more than 1,000 mmboe in a total area of 953 km 2. The quality of the oil ranges from 27 to 44 API. With the Integrated E&P Contracts, Chicontepec will reach production of 500 mbd. 3P reserves* 1,100 1, * Pemex base case forecast for Tertiary 6

7 Discovered: 1926 First production: 1952 Basin: Formation: Geological model: Trap type: Location Chicontepec Northern Veracruz and Western Puebla in the Gulf coastal plain. Background Tampico Misantla Chicontepec Submarine fans Stratigraphic Surface area: 4,243 km 2 Drilled wells: 3,268 Operating wells: 2,050 Shut-in wells: 1,218 Reserves (MMbpce) Forecasted Np Recovery factor OOIP 81.5 mmmb 1P 743 *current 2P 6,498 3P 17,037 ( ) 4,025 mmb 8 % 7

8 High Materiality Block Area Cumulative production 3P reserves (Tertiary) Prospective resources (Mesozoic) Type of hydrocarbon (sq.km) (mmboe) (mmboe) (mmboe) API Amatitlan Soledad Humapa Miquetla Miahuapan Pitepec , Total ,

9 Successful Use of Shale Technology 27 horizontal wells represent 10% of oil production* Two twin wells with multi-fracture stages * Over 2,000 producing wells in Chicontepec 9

10 Scope of the Integrated EP Contracts Hydrocarbon ownership. Mexico (Pemex). Activity. The contractor invests, executes, and delivers production. Payment. Upon delivery of production, and cash only, not in specie. Bidding variable. A NPV/b (fee) and an additional work commitment. Work commitment. Investment is predetermined in relation to undeveloped 2P reserves. Infrastructure. The contractor will have the right to use all infrastructure. Governance. Participation of Pemex and contractor in a steering committee. Sustainable development and national content. Included in contract provisions. 10

11 Business Model Return= q t r t s t q t = production, barrels s t = estimate of available income in $/b (after taxes) r t = adjustment factor in function of a NPV/b; Maximum value 1; or percentage neccesary to get to or maintain the maximum NPV/b Pemex tax burden, dollars per barrel Cumulative cash flows Million dollars Available income (variables) Oil price, dollars/b sq sqr year 11

12 Future Rounds: Shale Chihuahua Paleozoico Gas lutitas Sabinas Cretáceo Gas lutitas Burro Picachos Burgos Tampico Misantla Eagle Ford Gas lutitas Texas Jurásico Gas lutitas Shale Gas Provinces Eagle Ford/Agua New Haynesville Bone Spring /Woodford The IEA estimates that Mexico has the 4 th largest reserves in shale gas, with 681 TCF. Pemex estimates around of 297 TCF shale resources, equivalent to 62 BBOE. Currently, Mexico certified 3P gas reserves are 62 TCF, more than 50% of those are wet resources. Pemex Estimated Prospective Resources (62 BBOE) Veracruz More than 200 shale exploration prospects identified in five provinces. Wells drilled by Pemex confirm the extension of the Eagle Ford play into Mexico, with significant wet gas resources. Gas % Oil, 32, 53% 12

13 Bidding Rounds Calendar 2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Chicontepec Bidding Process Roadshows Workshops Award Offshore heavy oil Approvals 2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Deep water Approvals Project presentation Shale Approvals 13

14 Final Remarks Chicontepec s blocks have high materiality and certified reserves. The contractual model is in line with the activities required in Chicontepec. Simplified bidding process in place. Remote access to all information: technical data, contract model, bidding guidelines, news, events, through Bidding and award on the same day. Unconventional technology and know-how has recently improved productivity in Chicontepec. Upcoming bidding rounds for: offshore heavy oil, deep water and shale. The scheme has a risk-reward balance that considers the materiality of the blocks and technological challenge of reservoirs. 14

15 Disclaimer The information made available here is property of PEP. It is presented for promotional, informational, and for reference purposes, with the objective of sharing with the energy industry and other interested parties some ideas and considerations regarding certain technical, economic, legal and/or commercial aspects of hydrocarbons production service contracts. In addition, it may be used, in its case, to obtain feedback from industry sources or interested parties. The information is provided as is, and does not imply any kind of obligation on behalf of PEP and it does not take responsibility in regard to the certainty or reliability of the information, which has been elaborated only as reference. PEP does not guarantee that the information is exact, complete or useful; therefore, it will not be held responsible for damages, perjury or any other loss of any nature, derived from the information contained or referred to herein this document. The information and all referred maps, graphs, and materials are only provided as illustrative sources for the convenience of the interested parties. This information is subject to modifications, at any given moment, at PEP s sole discretion, without incurring in any responsibility as a consequence of such modifications. 15