16 Sep 2020 11:27

Lukoil postpones drilling at Block 12 of Mexican shelf until 2021

MOSCOW. Sept 16 (Interfax) - Lukoil was prepared to begin drilling at Block 12 of the Mexican shelf in September 2020, but due to quarantine restrictions imposed in Mexico and other countries, has made a decision jointly with Eni to postpone construction of geological exploration wells from 2020 to 2021, the company has told Interfax.

"The decision was made to avoid possible complications in carrying out obligations on the part of servicing companies amid pandemic conditions. Drilling at Block 12 is planned for H2 2021 using the ENSCO 8505 mobile offshore drilling rig operated by the Valaris company," Lukoil said.

Licensed blocks in which Lukoil is participating are at geological exploration stage. "The Saasken-1 exploratory well has been constructed at Block 10, which allowed for the processing of seismic data and clarification of the location for the second exploratory well. This well should be drilled in H1 2021. No well construction was planned for 2020 at Block 28. At the moment, geological material is being further processed," the company said.

"Despite the adjustment of schedules for construction of some exploratory wells, the company is planning to fully carry out the obligations assumed within the initial stage of geological exploration," Lukoil said.

Through the end of 2020, Lukoil will continue further study of the geological material at all of the license blocks. "With respect to Block 10, the company will consider alternative development options based on the construction of the first Saasken-1 exploratory well. As regards Block 12, preliminary development options will be calculated based on new geological data for the Gulf of Mexico as a whole," the oil company said.

Lukoil started work in Mexico in 2015 when it bought a stake in the Amatitlan block. block covers 230 sq. km and is 68 km from the city of Poza Rico in the State of Veracruz. Extracted oil is shipped by truck to the Soledad oil gathering facility 30 km from the Amatitlan block. Operator services are provided on a cost recovery basis. Amatitlan contains 4.2 billion barrels of oil and 3.33 trillion cubic feet of gas in shale rock.

In addition, in June 2017, Lukoil International Upstream Holding won the tender for oil Block 12 in the coastal waters of the Gulf of Mexico. Lukoil offered a royalty stake of 75%. The section is located in the oil province of Cuencas del Sureste, with an area of 521 sq km.

In March 2018, Lukoil and Eni were awarded rights to a property in the Sureste Basin, Block 28. Eni is the project operator with a 75% stake and Lukoil has 25%. Block 12 is located in the southern part of the Gulf of Mexico at a distance of 50 kilometers from the shore and the city of Torno Largo in the Cuencas del Sureste petroleum province. The block covers an area of 521 square kilometers with an average sea depth of 200 meters. The proximity to the recently opened Zama field raises the probability of successful work at the block, the company said. The block has undergone 3D seismic surveying with a number promising targets selected based on the results. The program called for drilling two wells by 2022.

Russian Lukoil and Eni in November 2018 signed a farm-out agreement on three properties on the Mexican shelf: blocks 10, 12 and 14. Lukoil will assign 40% in Block 12 to Eni, retaining 60%. Eni will in turn assign 20% in Block 10 and 20% in Block 14 to Lukoil, remaining the operator of both projects.

Eni discovered oil after drilling the Saasken-1 NFW drill at Block 10 in the Sureste Basin offshore Mexico. According to preliminary estimates, the site could contain 200-300 million barrels of oil, the company said in February this year.