| HOUSTON, March 9
HOUSTON, March 9 A pipeline network with spare
capacity could allow Mexico to export oil and gas from its
flagship offshore Trion project to the United States, the head
of Mexico's oil regulator said on Thursday.
The deep water Trion development, with prospective reserves
of almost 500 million barrels of oil, was farmed out in December
by state-run Pemex to Australia's BHP Billiton
, which became the operator of the $11 billion project.
The ailing Mexican oil firm, which kept a 40-percent stake,
jointly shares for the first time the risks and rewards of a
potentially lucrative project with a private producer.
Although a development plan has yet to be submitted, the
consortium could use a cheaper and quicker option of getting
production to the United States by using pipelines that serve
the neighboring Great White field on the U.S. side of the Gulf
of Mexico, Juan Carlos Zepeda, head of the national hydrocarbons
commission (CNH), said on the sidelines of CERAWeek energy
conference in Houston.
The Great White field, which is operated by Royal Dutch
Shell Plc, BP Plc and Chevron Corp, is
producing around 70,000 barrels per day (bpd), leaving 50
percent available capacity in a crude line and a gas line
connected to the U.S., Zepeda said.
"There are only 39 kilometers (24 miles) from the Trion
field to the Great White's facilities," Zepeda told Reuters,
noting that building a pipeline to Mexico's shore would be more
expensive and would take more time.
The pipelines from Great White field on the U.S. side of the
Perdido Fold Belt, the world's second-deepest oil and gas
production hub, are operated by U.S.-based Williams Companies
as part of its 1,370-mile (2,200-km) network of gas and
crude lines in the Gulf of Mexico.
Other options for Trion production include building
pipelines to the nearest ports, most likely Mexico's Tampico or
Brownsville in Texas, or setting up a Floating Production,
Storage and Offloading (FPSO) facility to handle the output.
Another block awarded to Pemex and China's state-controlled
offshore oil producer CNOOC, which in December gained
a foothold in Mexico's deepwater, is even closer to Great White.
"The (Pemex and BHP) consortium must submit an appraisal in
the coming 180 days, including test wells, to confirm the
field's extension and then a development plan must also be
submitted," Zepeda said.
Early production of light crude from Trion is expected for
2023, Pemex's director Jose Antonio Gonzalez Anaya said earlier
this week in Houston.
"For Pemex this is historic deal. For 80 years, Pemex never
had a partner with whom to share risks or equity," he said.
The project had been put aside in early 2016 due to the
company's budget cuts and resumed nine months later as part of
Mexico's long-waited oil reform.
MORE LICENSES COMING
The CNH, which oversees contracts and runs oil auctions in
Mexico, is offering 15 blocks for exploration and production in
shallow water under profit sharing agreements and 26 onshore
blocks under licenses, with results expected in June and July.
A new deep water bidding round in the coming months is
expected to offer blocks mostly in the same basins of Perdido
and Salina. As in previous offshore auctions, licenses will be
offered by the government to operate these blocks, Zepeda
The last bidding round in the short term will be the first
for so-called unconventional resources.
Onshore blocks with shale oil and shale gas reserves close
to the Eagle Ford basin in Texas will be offered, as well as
areas in the Tampico Misantla formation, which is estimated to
hold some 35 billion barrels of oil, mostly in shale rock.
(Reporting by Marianna Parraga in Houston. Additional reporting
by David Alire in Mexico City; Editing by Marguerita Choy)