Just after Mexico announced it would open to international oil and gas investors after 76 years of nationalization, exciting exploration plays believed to exist on the Mexican side of the Perdido Fold Belt and in the Bay of Campeche salt basin became of great interest to third-party investors.
Mexico began its first round of bidding last December with one major disadvantage to the bidders: an almost complete lack of seismic data to investigate the detailed regional geology of Mexico.
“Until recently, there has been no seismic data available for companies outside of Pemex,” said AAPG member Mark Gresko, former director of geology and geophysics at ION Geophysical, speaking of the country’s national oil company Petróleos Mexicanos.
“Mexico is a frontier basin for everyone except Pemex,” he said.
Anticipating Mexico’s announcement, ION executives partnered with the University of Texas Institute for Geophysics, which conducted a scientific 2-D seismic survey of the southern Gulf of Mexico approximately 30 years ago, and began reprocessing the data at a fast and furious pace - completing the process at the end of 2014.
“ION had insight into the opening of Mexico,” Gresko said. “It worked out well for them in the short term.”
The seismic survey, formally called YucatanSPAN by ION, was made available to companies looking to understand the regional geology in the southern Gulf of Mexico.
ION followed that effort with the shooting of an extensive 2-D seismic program totaling more than 22,000 line-kilometers throughout the southern Gulf of Mexico.
When combined with the company’s existing data from its YucatanSPAN, GulfSPAN and FloridaSPAN packages, the new data from MexicoSPAN will deliver what ION announced recently as “the industry’s only complete, basin-wide regional view of the Gulf of Mexico.”
Fast-track, pre-stack time migrated (PSTM) data has already been delivered to the underwriters. Final PSTM and pre-stack depth migrated data will be delivered in the first quarter of 2016.
The MexicoSPAN program, which completed acquisition in September, coincides with Mexico’s first bidding round and offers operators broad-based insight into Mexico’s geology in the Gulf, Gresko said.
“2-D seismic data provides the big picture that tells you about the whole basin,” he said. “3-D is looking at things under a microscope.”
While Mexico is making available 3-D seismic data for potential investors, Gresko said most geologists want to study data from 2-D seismic to high-grade areas before spending a greater amount of money to take a closer look.
Advantages of 2-D Seismic
Using seismic streamers that are 12 kilometers long, ION has generated a widely spaced and deeply imaged “grid” that bends and curves through significant features in the Gulf of Mexico.
“In order to get the best picture, you shoot a line perpendicular to the structure or feature you are looking at, so the lines curve when the geology underneath has moved in a different direction,” Gresko said. “It ends up looking not very grid-like but more like a spider’s web.”
Long cables allow a geoscientist to “see” deeper into a basin. During the MexicoSPAN project, ION captured 18 seconds of “listening” - as opposed to the more typical 6, 8 or 10 seconds of recording.
“The longer you listen, the deeper you hear, and the deeper you can image,” Gresko said, explaining that ION’s data reaches depths up to 40 kilometers.
“That’s much deeper than you would vertically drill a well,” he said. “But it gives you a full picture of the sediments and underlying rocks within the basement of the basin.”
Geologists reply on 2-D seismic for knowledge such as a basin’s age and history, the types of rocks it contains, faults, folds, stratigraphic features and deep crustal images.
The seismic is shot using wide spacing, primarily 10 to 25 kilometers between lines. However, if an important structure is noted, then more closely spaced lines are shot.
Two areas where more detailed geophysical data was gathered by ION are the Perdido Fold Belt and the Campeche salt basin, Gresko said.
“These are places where we know high-quality exploration prospects exist so we put more dense lines there,” he said. “A lot of companies have a specific interest in the Perdido area and areas in the south in the Bay of Campeche. While Pemex has drilled a handful of wells in the Perdido fold belt, it has not explored very much in the Campeche salt basin. The geology there is very difficult and complex, but it’s very prospective. It looks interesting from an exploration point of view.”
Companies that choose to acquire 2-D seismic data and subsequently want to know more about a particular area can request that close-space 2-D seismic be shot, or they can acquire 3-D seismic data, which is now available at Mexico’s National Hydrocarbons Commission (CNH).
“Mexico has put together data packages,” Gresko said, “but they lack the initial 2-D data that companies need to make their own interpretations and decisions.”
Back to Economics
Oil has been proven to be in Mexico. However, the lagging question continues to be how economical it is to produce.
“The hydrocarbon system is there,” Gresko said. “The price of oil is key.”
On the U.S. deepwater side of the Gulf, there are existing production facilities that make future U.S. discoveries economically viable. However, if new prospective areas are found on the Mexican side, the discoveries must be large enough to support the cost of new infrastructure to move the hydrocarbons to market.
“The United States has been involved in expensive deepwater drilling, but the costs are coming down because of more efficient drilling and development processes,” Gresko said. “Producing oil on the Mexican side at $40 a barrel will be challenging. I would think that if prices increase to $60 or $70 a barrel, things will become economical on the Mexican side.”
However, even if operators have to wait out the current price of oil, 2-D seismic imaging spanning the entire Gulf of Mexico could assist operators on the U.S. side, Gresko said.
By correlating key U.S. well data with the 2-D Mexican seismic lines, new information about U.S. geology might be revealed. For example, the carbonate reefs of the southern Gulf of Mexico could have similarities to those near Florida, Gresko said. If carbonate plays in Mexico are successful, the same could hold true on the U.S. side.
The key to everything begins with 2-D seismic data.
“It gives you the big picture,” Gresko said. “And, when you look at a basin as a whole it helps piece the basin history together. Then you’ll make better business decisions as to where to focus your exploration activity and investments.”