Considerations on well drilling authorizations
SW: SHALLOW WATER; DW: DEEP WATER; ON: ONSHORE
*AS EXPECTED BY CNH
Up to date, only 17 of 139 committed wells have been completed: 16 appraisal or production wells (rounds 1.2 and 1.3) and one exploratory (Talos’ Zamma-1), which discovered a 1,800 MMboe shared reservoir with PEMEX.
The remaining 122 committed wells are distributed among 38 contracts where 34 have an approved plan (exploration, appraisal or development). Out of these, 28 have not started drilling any single well, despite having an approved plan for more than 2 years.
DAYS SINCE PLAN APPROVAL
In our experience, this is often due to a poor regulatory compliance, lacking a comprehensive approach of the technical and environmental requirements. As a general suggestion, we recommend considering the following essential elements in the preparation of requests for drilling authorization:
- Include the well to be drilled in an approved plan (Exploration, Appraisal or Development).
- Explain each stage in the Drilling Program including contingency scenarios.
- Schedule of activities of Drilling, Completion and Abandonment and include estimated total cost.
- Feasibility analysis of Drilling and Completion according to operator’smethodology.
- Present a third party certification of: drilling program, risk assessment and mitigation plan, among others.
Additionally, it is necessary to consider updating other obligations like ASEA’s MIA, SASISOPA, Environmental Risk Assessment, permits for waste management, among others.
As a result of the first (9) Mexican bidding rounds, the awarded companies committed to perform, at a minimum, a broad variety of activities where drilling wells represents the main investment.
Committed Investments (mmusd)
* With CNH data, Oct 2018.
In Talanza, we assist our clients in the preparation of their well drilling authorizations, HSE requirement fulfillment and the request of releasing work commitment guarantees. We are a multidisciplinary group: engineering, law, energy regulation, HSE, social, finance and government. Our competitive advantage relies on our team’s very own insight and understanding of the energy reform in which each of Talanza’s members has the dual perspective, as an active key player in the design and implemen- tation of the reform, and as actual operators of these regulations, from each of the different Mexican regulators.