A new deepwater natural gas province with possible reserves of 1.5 trillion to 2 trillion cubic feet has been discovered off the coast off Mexico's southern Gulf state of Veracruz, state-owned oil and gas firm Pemex said Tuesday.
The province's potential was confirmed by the Kunah-1 well, drilled by the Centenario rig in waters 2,157 meters deep some 125 kilometers northeast of the port city of Veracruz, Pemex added.
The area, known as the Catemaco Fold Belt, also includes two previous gas discoveries, Lakach and Piklis.
"It's not clear whether these discoveries are commercially viable, given the very low current price of natural gas," said Luis Miguel Labardini, a partner of the Mexico City-based consultancy Ernesto Marcos y asociados. "But in the case of Lakach, Pemex is proceeding on the basis that it is commercial," he said.
Kunah-1 was drilled by the Centenario, one of three semi-submersibles hired at a day-rate of $500,000 for a Pemex deepwater offensive. The other two, Bicentenario and West Pegasus, are currently deployed close to Mexico's maritime border with the US.
Including the efforts of Kunah-1, Pemex has drilled 20 wells in waters of depths of 500 meters or more. So far, no oil has been found, only gas.
Pemex is facing major disadvantages in its deepwater exploration, according to Labardini. "Other operators spread their risks but Pemex cannot. That's because Pemex cannot offer rewards in return for the risks," he said.
Under Mexican law, Pemex cannot share oil produced in conjunction with other operators. Under the constitution, all hydrocarbons belong to the state.
