Offshore opportunities from Aruba to the Falkand Islands have national and independent companies keeping their eye on Latin America.
Current opportunities and future exploration potential were common themes in the Latin America and Caribbean Region Session held at the Annual Conference and Exhibition (ACE) in Houston last month.
The session, led by Victor Vega of Shell and Ulises Hernandez of PEMEX included an overview of the past, present and future activity in eight countries.
“The Region has enormous potential, both onshore and offshore, in conventional and unconventional resources,” said Victor Vega, current president of AAPG’s Latin America and Caribbean Region.
Exploration Trends
Carlos Macellari, director of exploration and development at Tecpetrol, provided an overview of exploration trends in Latin America.
He noted that the largest fields discovered during the last 10 years in Latin America were found in the deep offshore, with more than 77 BBOE added and average field sizes of 550 MMBOE. Most of the discoveries so far are located in the pre-salt of the Campos and Santos Basins in Brazil.
Macellari noted that recent discoveries in offshore Guyana show that many of the Atlantic basins remain poorly explored and hold important potential. Other areas of focus in coming years include the deep offshore Caribbean basins of Colombia and Mexico.
Colombia: A New Hydrocarbon Province
Jorge Calvache, offshore exploration manager at Ecopetrol, described the Colombian national oil company’s transition from an onshore heavy oil company to an offshore company focusing on gas.
He shared Ecopetrol’s plans to participate in operations of five wells in the Colombian Caribbean during 2017.
With more than 100,000 kilometers of 3-D seismic data obtained in the deep and ultra-deep water, Ecopetrol and other partners see enormous potential in the region.
He highlighted recent discoveries, including Orca 1 (operated by Petrobras), drilled in the Tayrona block in 2014.
Kronos 1 (operated by Anadarko), in the Fuerte Sur block, drilled in 2015 found gas in a sandstone reservoir. Purple Angel 1, drilled to the northeast in February 2017, confirmed the continuity of the field.
Upcoming projects include Gorgon 1 (operated by Anadarko), also located in the Purple Angel block, and Molusco, in the RC 9 block, the first well to be operated by Ecopetrol.
“We know that we are learning to operate in the offshore, so the knowledge and experience of our partners is very valuable,” Calvache said.
While Magdalena Delta traditionally has been recognized as a biogenic gas province, Calvache said future exploration might prove differently. He described how piston coring and high resolution geochemistry have provided evidence both of a biogenic gas system and an active thermogenic system, potentially tied to Mesozoic-oil prone source rocks.
Offshore Colombia has an unranked potential of 35-87 TCFG of gas, providing great opportunities for Colombia and for the region, Calvache explained.
Production is declining in the country’s primary gas source, the Chuchupa-Ballena fields discovered in the 1970s by Texaco (now Chevron), resulting in a gas deficit in Colombia. At the same time, neighbors like Ecuador, Panama, Jamaica, Aruba and the Dominican Republic, need more gas.
“Ecopetrol would like to commercialize gas to meet this demand,” Calvache said.
Currently Ecopetrol operates one block, RC9, located in the shallow waters off the Guajira peninsula, North of the Chuchupa-Ballena field. The company hopes to become a more active operator in the future.
Western Caribbean: Perla and Beyond
Mikel Erquiaga, global new ventures director at Repsol Exploración SA, provided a 50-year overview of hydrocarbon exploration in the Western Caribbean offshore basins and shared next steps Repsol and ENI have following the Perla field discovery in 2009.
Erquiaga noted that the most intense exploratory activity took place in shallow waters in the 1960s and 70s, with the first exploratory wells drilled in the Nicaraguan Rise in Nicaragua and Honduras and in Colombia’s Guajira peninsula.
This first regional exploratory stage targeted primarily Eocene-Miocene carbonate banks/build-ups above basement structural highs with little success. From the 1980s onward, exploration activities nearly ceased in the Western Caribbean, which was believed to be a biogenic gas province.
That all changed in 2009, with the discovery of thermogenic gas and condensate by Perla-1 well in the Gulf of Venezuela. Erquiaga described Perla as a “paradigm breaker.”
The discovery of Perla gas field, with 15 TCF of reserves in a lower-middle Miocene carbonate build-up, proved for the first time, the existence of a thermogenic petroleum system in the western Caribbean.
Since then, Repsol’s and other companies’ exploration campaigns have focused on identifying additional thermogenic hydrocarbons.
After Perla, Repsol started obtaining more acreage and the company now has assets from Trinidad to offshore Colombia. The company moved to the Nicaraguan rise and drilled Paraiso, which did not have positive results. Erquiaga noted that the source rock is very immature in Nicaragua, and when the company realized they would not find large accumulations of oil, they chose not to continue further.
Plans for 2017 include drilling Siluro, located in offshore Colombia and future activity in Aruba in the Curacao trough. The company also is working with Petrobras, Ecopetrol and Statoil to drill wells in the Orca discovery area in the Tayrona block.
Mexico: Opportunities for Partnerships
José Antonio Escalera , vice president of exploration for Petróleos Mexicanos (Pemex), and Ulises Hernández, Pemex’s vice president of geosciences and technical assurance, shared how Mexico’s energy reform offers unprecedented opportunities for exploration and development offshore.
“There are important prospective resources offshore Mexico, particularly in deep water,” Hernández said, adding that implementing new concepts and new ideas will further increase the country’s potential identified to-date.
Mexico’s energy reform has brought changes to Pemex’s operations and strategies, he said.
“The energy reform defined new principles to manage national energy resources. There are new institutions, new guidelines that led to new rules in Pemex,” he said. “We now need to compete for resources.”
Hernández shared Pemex’s short and long-term objectives: strengthen portfolio, maximize value capture; seek competitive positioning, share risk and establish partnerships.
To make the most of the areas that it has retained, Pemex has focused investment on the most profitable areas, maintaining reduced evaluation operations in areas that will provide reserves to sustain production in the medium- and long-term.
Hernández noted that Pemex designed a farm-out strategy to optimize value capture by resource type.
Farm-outs in deep water and areas with unconventional plays will allow Pemex access to technology, international best practices and share technical and financial risks.
Though he did not discuss specific projects, Hernández noted that 2017 will bring exciting news for companies interested in partnering with Pemex.
“Pemex will be farming out very interesting exploration and exploitation opportunities over the next months, ranging from deep water, shallow water, conventional onshore to unconventional resources,” he said, “So keep an eye on Pemex’s farm outs.”
Peru: Moving Deeper in the Pacific Offshore
Federico Seminario, exploration manager at Pluspetrol Peru Corporation, explained that Peru’s 3,079 kilometers of shoreline have eight offshore basins, three of which have a proven petroleum system.
One of those basins is Talara, home to the second well drilled in America after the Drake discovery in Pennsylvania in 1859.
“Since 1863, Talara has been and is still producing oil and gas. We are sure that there are more opportunities to be discovered in the offshore of Peru,” Seminario said.
Because Pluspetrol is not drilling offshore currently, representatives from Karoon and Gold Oil in Peru provided information on the offshore component of Seminario’s presentation at ACE.
Talara has had a cumulative production of 1.6 BBO, with at least 20 percent of the total production from offshore. To date, all the offshore producing wells were drilled into the shallow water less than 380 feet of water depth. Middle and deepwater remains unexplored, but there are several prospects waiting to be drilled, including the Cuy prospect in Block Z34, a fourth way closure Anticline with a 3,800 meter drilling depth.
Cuy, expected to be drilled in 2018, will be operated by Gold Oil Peru (Baron Oil PLC) in partnership with Union Oil and Gas Group. According to data from Perupetro, 413 MMBO of unranked recoverable oil is anticipated.
The Tumbes Basin offshore is in early stage of production and remains a largely under-explored area with a high prospective resource potential, Seminario said.
“New information coming recently from seismic, seabed drop cores, encourages the industry to extend exploration toward to mid and deep water in a wide variety of play types,” he said.
Karoon mapped seventeen prospects in the Tumbes Basin, and has leads with multiple targets in block Z34. High quality 3-D seismic shows large untested structures with amplitude anomalies. Karoon, in partnership with Pitkin, plans to drill the Marina and Bonito prospects in 2018. The company projects volumetric of approximately 350MMb of oil in each prospect.
Seminario highlighted opportunities beyond Talara and Tumbes.
“The Sechura Basin proved a new play in fractured Paleozoic rocks. Some shallow water prospects have been mapped recently and are waiting for drilling. The other five basins are considered unexplored since only four wells have been drilled in the Trujillo Basin,” he said
Uruguay: New Frontier in the South Atlantic
Oscar López-Gamundi, director of P1 Consultants, shared results from a study conducted by his company and ANCAP, Uruguay’s regulatory agency.
He described the Punta del Este Half Grabens, an early- to late Cretaceous play located up to 3,500 meters below mudline in offshore Uruguay. He considers the half grabens and the overlying large deltaic system with associated turbidites to be the most promising plays for exploration in the Cretaceous section in offshore Uruguay.
Analogous discoveries include Sea Lion, Zebedee and Isobel Deep in half grabens related to the South Atlantic opening in the North Falkland/North Malvinas Basin, located 1,000-1,200 kilometers south. Partial analogs also include pre-salt discoveries in offshore Santos Basin.
López-Gamundi has spent the last 12 years working offshore Brazil and Uruguay, and he also has worked in other offshore areas of West Africa, the Gulf of Mexico, Trinidad, Colombia and Peru.
“The Cretaceous half grabens in offshore Uruguay have many similarities with the pre-salt discoveries in offshore Santos and Campos Basin to the north and the North Falkland / North Malvinas Basin to the south,” he said, citing similar potential of syn-rift lacustrine and overlying sag source rocks, as well as the trapping characteristics.
The Punta del Este Half Grabens will be a part of an offshore Uruguay bid round, to be announced in mid-2017. He expects the first well to be completed by the end of 2019.
“The most likely source rock is lacustrine, like in the discoveries to the south in the North Falkland/North Malvinas basin; therefore we expect waxy oil with low GOR,” said López-Gamundi.
Brazil: the Libra Block’s Massive Potential
Sylvia Anjos, applied technologies general manager deputy at Petrobras, shared information from Libra, a structural/stratigraphic play in the pre-salt basins of Southeast Brazil.
Anjos, with colleagues Keith Lewis and Fernando Borges, focused on reservoirs formed by microbial carbonates deposited in a lacustrine environment, primarily mainly during the Aptian age. The reservoirs, located between five to six thousand meters deep, produce light oil with high GOR and CO2 content.
The Libra Block is managed by a consortium formed by Petrobras (40 percent), Shell (20 percent) CNPC (10 percent) and CNOOC (10 percent). Pre-Salt Petroleum (PPSA) represents the Brazilian government and manages the Production Sharing Contract.
The consortium obtained the block as a part of the Brazilian National Petroleum agency’s ANP in the first production sharing contract bid round in October 2013.
In only three years, nine wells have been drilled and three have been completed. Two others are being drilled currently.
Anjos said the Libra Team plans to drill five wells in 2017, and they expect to find more oil.
“The block is divided into three areas,” she said. “So far we have concentrated in the Northwest area, and the central and Southeast areas are still in the exploratory phase.”
Anjos joined the Libra Team in September 2016 after being involved in pre-salt exploration since Petrobras’s first wildcat and the Libra discovery. She represents Petrobras on the Libra Joint Project Team.
“The most striking thing in the Joint Project Team is the integration of areas and teams from exploration to production,” she said. “The integration with partners sharing the same office space promotes a day-to-day discussion on critical topics, which brings benefit to the Libra project.”
Brazil had several pre-salt discoveries before Libra, and production is established at 1.3 million barrels of oil per day. ANP bid the Libra block for 8 to 12 BOE.
Anjos said Brazil provides tremendous opportunities for companies interested in offshore exploration and development. In addition to the pre-salt prospects in the Santos and Campos basins, the equatorial margin remains under explored with several wells yet to be drilled, she said.
“Petrobras has proven the great potential of offshore exploration and Production in Brazil,” she said. “We hope for more exploration investment because we certainly have a greater potential to be revealed.”
“Industry is expecting upcoming offshore bid rounds in Argentina, Brazil, Mexico and are also waiting for additional results from four key wells that will be drilled in the offshore,” said Vega.
He noted that offshore will continue to be a focus throughout the Latin America and Caribbean Region, and the AAPG Region leadership team is working to provide information and training opportunities.