KUALA LUMPUR (May 3): The discovery by SapuraOMV Upstream Sdn Bhd, together with its joint-venture partners Wintershall Dea and Harbour Energy, in the Kan-1 exploration well, located 25km off the coast of Tabasco, Mexico is one of the largest since 2020, according to Wood Mackenzie (WoodMac).
In a statement on Tuesday (May 2), the consulting firm said the discovery is one of the largest in Mexico’s shallow water since Zama, made by Talos in 2017, and Saasken, made by Eni in 2020.
In a filing with Bursa Malaysia last Thursday (April 27), SapuraOMV said drilling commenced in October 2022, and the target reservoir was successfully reached in January 2023.
“Preliminary results are encouraging, with moveable hydrocarbons confirmed in the targeted reservoir sequence, and based on preliminary estimates, the discovery may contain 200 million to 300 million barrels of oil equivalent (mmboe),” it said.
WoodMac principal research analyst for Latin American upstream oil and gas Adrian Lara said exploration blocks taken in the 2014-2018 licensing rounds were mainly taken by international oil companies (IOCs), and had a focus on unexplored areas with greenfield opportunities.
“IOCs have been more successful in recent years in both discovered and commercial volumes in shallow-water exploration than the national oil company Pemex, which has focused on established areas,” said Lara.
For the asset, WoodMac assumes a typical 30% recovery factor (RF) and a higher RF scenario at 40%, in which Kan would hold 75-100 mmboe of recoverable resources.
Considering a similar gas-oil ratio to nearby developments, the firm said Kan may contain 22 billion to 30 billion cubic feet of gas. WoodMac’s initial analysis shows that Kan requires a US$54.7/bbl to US$68.5/bbl Brent price to break even (NPV10, 2023) under the above-mentioned scenarios.
WoodMac senior research analyst Diego Alviso said that currently, Wintershall is working in a second exploration well known as Ix-1 in the same block, also targeting an Upper Miocene reservoir with similar expected prospective resources.
“Another discovery in the block would greatly aid the justification of a possible cluster development.”
“Doubling down its presence in Mexico is delivering positive results for Wintershall Dea. The operator recently exited other Latin American countries, but increased its participation in Mexican projects such as Hokchi.
“With a possible increase in future developments with Kan in its portfolio, Wintershall is well positioned to be within the top four operators in the country,” said Alviso.