Commentary: Massive Development Pushes Mexico’s Cantarell to Record Production – But How Long Will it Last? (Part 1 Of 4)
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Mexico has clearly established itself as a critical supplier of oil to the U.S. But this is a relatively recent development that will soon begin to change. Prior to 1975, Mexico had little or no oil available for export. Great discoveries during 1972-75 in the states of Tabasco and Chiapas (the Reforma fields) suddenly transformed Mexico to a major oil exporter. But this was only a prelude.
Cantarell, A Unique Resource
In 1976, Mexico discovered one of the world’s truly great oilfields, Cantarell, in the Bay of Campeche west of Yucatan. The discoveries vaulted Mexico to No. 1 among all suppliers of oil to the U.S. during 1982-86. Mexico has been among the top three suppliers ever since, averaging about 1.5 million b/d since 2000 and 1.8 million b/d in the first half of 2006. Cantarell’s phenomenal production made this possible. The figure below shows Mexico’s oil production since 1965 and the dominance of these discoveries.
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Petroleos Mexicanos (Pemex), the national oil company, tried not to boast about the discovery and early development of Cantarell, but international petroleum scientists could see that Pemex had “a tiger by the tail.” By 1984, geologists in North America and Europe estimated Cantarell’s ultimate recovery at 17 to 20 billion barrels of oil (1). By yearend 2006 it will have produced 11.5 billion barrels. Typically, oilfields begin to decline after producing 50-60% of their recoverable reserves.
Extremely rich formations at Cantarell suggest that its decline will be steep. Cantarell’s producing formations are small in area, highly concentrated, and well defined. A small reservoir is fully developed with fewer wells than a larger reservoir. Cantarell has four producing formations separated by geologic faults. Each “fault block” has certain physical characteristics related to the quantity of oil present and the ease with which the oil moves through the rock formation to wellbores.
The Akal fault block is far and away the most prolific, containing 90% of Cantarell’s reserves (2). While Akal’s productive area is small–10 by 4 kilometers–its thickness is said to be 1,200 meters (3)! Compare that to the Prudhoe Bay formation, the most prolific in the U.S.: 50 by 16 km, 20 times the area of Akal, but with only two-thirds as much oil. Prudhoe’s formation is about 100 meters thick. Akal is one of the world’s most concentrated accumulations of oil, matched only by a handful of formations clustered on one side of the Persian Gulf.
Early Development
Pemex has not passively watched its gift of Nature march toward decline. They knew that continuous development would be needed to recover the volume of oil that geologists had estimated. Pemex continued to build new production platforms and drill new wells; they increased pipeline and gas treatment capacity to handle greater volumes of produced gas to reduce the “back pressure” the oil wells must resist. Continued development maintained Cantarell’s production rate of one million b/d.
Around 1988 Pemex began to place Cantarell wells on “gas lift,” a conventional production method that maintains production rate at a high level. Natural gas is injected to the bottom of production wells where it mixes with the oil, making a lighter mixture that is pushed to the surface. Compression energy supplied at the surface supplements the natural reservoir pressure. Pemex constructed an entire network of subsea pipelines for gas lift operations. By 1991 60% of Cantarell’s wells used gas lift, with almost 90% in 1994. Gas lift and associated infrastructure pushed Cantarell’s production rate to a record 1.4 million b/d in 1999 (4).
Development to Maintain Reservoir Pressure
Then Pemex grappled with another common oilfield trait: declining reservoir pressure. By 1994 Cantarell had lost 40% of its original pressure. Under lower pressure, the oil releases dissolved gas. Dissolved gas is a critical force that drives oil up wellbores to the surface. Declining reservoir pressure and loss of dissolved gas, therefore, decreases the volume of oil that can be ultimately recovered.
Thus was born the $6 billion nitrogen injection system to maintain Cantarell’s reservoir pressure. Pemex enlisted loan guarantees from Japanese and North American banks, and technical services from international consortia for the full range of oilfield infrastructure. The centerpiece is a $1 billion onshore plant that extracts nitrogen from the atmosphere. It is a power-hungry process that features compression capacity exceeding 500,000 horsepower, and electrical generation capacity of 600 megawatts (5, 6).
The pressure response at Cantarell was almost immediate. The first phase of nitrogen injection began in May 2000 and reached full capacity in December. The decline of bottomhole pressure was halted in July 2000. Pressure increased slightly by yearend (7). Production rates continued to set new records: 1.7 million b/d by yearend 2000, an average of 1.85 million b/d in 2002, and more than 2 million b/d in 2003 and 2004. However, Mexico’s energy ministry reported that Cantarell production fell from 1.94 million b/d in December 2005 to 1.74 million b/d in June 2006, or 10.3% in 6 months (8).
Whence the Decline?
Is this the first sign of decline? Consider the presentation by a representative of Pemex at a technical session of the Offshore Technology Conference in Houston in May 2001. Pemex expected Cantarell to produce 2 million b/d by yearend 2001 and hold that rate for four years. Their projection was substantially accurate.
The Pemex rep went on to say that following the 4-year plateau, production would begin to decline. At the same time less nitrogen would be injected into Cantarell, thus allowing nitrogen to be injected into other offshore fields. (3)
Now the picture becomes clear. In 2001 Pemex anticipated that Cantarell’s decline would commence in 2006 and that they would decrease nitrogen injection. The effectiveness of nitrogen injection diminishes as the concentration of oil in the formation decreases. Continued injection at capacity would merely fill more of the formation with nitrogen and break the pool of oil into pockets that cannot be recovered. With less nitrogen injection, reservoir pressure is likely to resume its decline unless Pemex chokes back the wells, thus reducing production further.
The Pemex rep also said that oil recovery would be 2.3 billion bbl more with nitrogen injection than without it. True enough, but that increment should not be added to the original estimated recovery of 17-20 billion bbl. Pressure maintenance is a conventional recovery method and would have been included in the original estimate.
We already know where the excess nitrogen will go when Cantarell begins to decline: the Ku-Maloob-Zaap complex, mentioned many times as an increment of new production that could partially offset Cantarell’s decline. We will examine that potential in the next Commentary. Our next study will develop a decline scenario for Cantarell to estimate how much oil might be lost to the world market and to the U.S. supply by 2010 and 2015.
References
1. “Giant Oil and Gas Fields,” Carmalt and St. John, Future Petroleum Provinces of the World, American Association of Petroleum Geologists (AAPG) Memoir 40, 1984
2. “The Sihil Field: Another Giant Below Cantarell, Offshore Campeche, Mexico,” Acquino, et. al., Giant Oil and Gas Fields of the Decade 1990-1999, AAPG Memoir 78 (2003)
3. “Updating Proyecto Cantarell,” Oil and Gas Journal, May 14, 2001, p. 15
4. “Pipeline Installations Critical in Cantarell,” Ibid, August 27, 2001
5. “Pemex Launches Massive Cantarell Project,” Ibid, October 20, 1997
6. “World’s Largest N2-Generation Plant Starts Up for Cantarell Reservoir Pressure Maintenance,” Ibid, March 12, 2001
7. “Pemex Development Tracking Fiscal, Technological Strategies,” Ibid, May 7, 2001
8. “Despite Falling Output, Mexican Politics Keep Foreign Operators Out,” D. Shields, Offshore, September 1, 2006, www.offshore-mag.com
Tom Standing began his career as a chemical engineer in refinery operations. He later shifted careers as a civil engineer for the San Francisco water system. He is self-taught in the sciences of petroleum production, geology, and geochemistry and has studied the production histories of hundreds of oil fields.
(Note: Commentaries do not necessarily represent ASPO-USA’s positions; they are personal statements and observations by informed commentators.)
