Re: Article that Pemex Makes Huge Oil Discovery This news article seems to overstate the find. While it is a big discovery, it does not state how much of that oil is expected to be recoverable. “The offshore fields combined could increase Mexico's production by up to 210 million barrels of oil and 350 million cubic feet of gas a day, Pemex said.”
You can’t get 210 million barrels a day out of a 180 million barrel discovery.
Perhaps they meant 210,000 barrels a day. If they did and this oil field gets fully developed and if it contains 180 million barrels of recoverable oil, at the rate of 210,000 barrels a day there is sufficient oil for a field life of 2.34 years. Not so grandiose as Pemex states.
The Amititlan block, by itself, in the Upper Jurassic shale without the Chincontepec shallower oil that ROE is working to prove up with the Proof of concept well is potentially at least ten times larger than this great discovery.
The ROE website sets out that their estimate of the oil in place per acre foot as being 564 barrels, the depth being 650 feet, and the total number of acres being 60,000 on the Amititlan block. By my calculations the estimated oil in place should be 21,996,000,000 barrels of oil, not the 6,200,000,000 as stated on the page. At an 8.0 % recovery factor the Amititlan block will have recoverable oil of 1,759,680,000 barrels which is more than 3 times the 500 million barrels set out on the webpage.
If I am correct on these calculations, then there is sufficient oil in place to produce at the rate of 200,000 barrels per day for 24 years.
At U.S. $ 60.00 per barrel, and a 20 per cent ownership and a 20% royalty, that is revenue of $1,752,000,000 per year to Pemex and the Government.(Half to each, and Pemex has been paying 80% of its revenue in taxes to the Government.) That kind of money, per year, will buy a lot of schools, social programs, and infrastructure and that is why this field will be developed.
ROE has impressed PEMEX. ROE has one of the best teams of shale oil developers in the world.
The above numbers are based on primary recovery as there has been little use of secondary recovery techniques in shale oil production.
If allowed to go ahead, then ROE could have this field producing at this level well within President AMLO’s mandate of six years.
There are at least five other fields as large or larger than Amititlan surrounding Amititlan, all ready for development.
There is virtually no environmental negatives when fracking shale for oil, the only potential is the disposal of fracking fluid and ROE can either recycle or clean it.
The above numbers are based on the numbers provided on the website. More accurate numbers will come out once the Upper Jurassic proof of concept well is complete and tested. If the analyses and the production support the numbers currently on the website, then, in my opinion it will be virtually impossible for AMLO and his Government to say no to this development.