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Claudio de la CerdaExploration and Production Director
Conventional and Unconventional Resources in Mexico
Mexico City | Jun 19th| 2018
Agenda
• Hydrocarbons potential in Mexico
• Mexico Strategy. Five Year Plan
• Surface and social assessment for contractual areas design
2
Hydrocarbons potential in MexicoResources & Reserves
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0
500
1000
1500
2000
2500
3000
3500
Oil Production (Mbd) Gas Production (MMcfd)
Oil IndustryNationalization
Burgos & Macuspana Discovery
First Shallow WaterDiscoveries
Oil imports started
Chiapas-Tabasco Sitio Grande-Cactus FieldsDiscoveries
Cantarell Discovery
Burgos & Veracruz reactivation
Cantarell startsdeclining
Peak Oil Production
Faja de Oro Discovery
Foreign Companies
First reserves incorporationfrom Non-Pemex
Poza Rica Field Discovery
México becomes thesecond largestoil producer in the world
First Oil WellDiscovery La Pez-1
Source. Petróleos Mexicanos
Production History
4
Mexico reserves evolution
5
32
,61
4
30
,83
7
20
,07
7
18
,89
5
17
,65
0
16
,47
0
15
,51
4
14
,71
7
14
,30
8
13
,99
2
13
,79
6
13
,81
0
13
,86
8
13
,43
9
13
,01
7
10
,24
3
9,1
61
8,4
84
12
,19
6
11
,86
2
16
,96
5
16
,00
5
15
,83
6
15
,78
9
15
,25
7
15
,14
4
14
,51
7
14
,23
7
15
,01
3
12
,35
3
12
,30
6
11
,37
7
9,9
66
7,5
50
7,6
09
7,6
78
11
,34
3
10
,25
1
12
,99
0
13
,14
1
13
,42
8
14
,15
9
14
,60
5
14
,62
1
14
,73
8
14
,84
6
14
,23
7
17
,67
4
18
,35
6
17
,34
3
14
,42
1
8,3
48
9,0
89
9,3
05
56,154
52,95150,032
48,041 46,914 46,418 45,376 44,483 43,563 43,075 43,047 43,837 44,53042,158
37,405
26,140 25,858 25,467
0
10,000
20,000
30,000
40,000
50,000
60,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million of barrels of oil equivalent
Proven Probable Posible
*Original Volume 3P
Cumulative Prduction = 59.9
*Original volumen in place = 291
+ + 3P Reserves = 8.4 + 7.6 + 9.3 = 25.4
Contingent Resources = 1.8
Prospective Resources = 112.8
Deep Water = 27.7
Shallow Water = 14.6
Land Conventional = 10.2
Land Unconventional = 60.2
Remaining Volume = 203.9
Mexico Reserves and Resources representation(1 january 2018). Volume in mmmboe
=
1, 000, 000, 000
barrels of oil
equivalent
=
1 mmm boe
National Production
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Mile
s d
e b
arri
les
dia
rio
s
Oil Production (mbd)
Otros Cantarell
1.6 MMbd
7
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Mill
on
es d
e p
ies
cúb
ico
s d
iari
os
Natural Gas Production (mmcfd)
Terrestre Marino
2 Bcfd
Five Year PlanA successful opening
64% North America
Canada, U.S.A, México
15% Europe
Germany, Spain, France,Netherlands, Italy, Norway,
United Kingdom, Russia13% Asia
China, Japan,Malaysia, Thailand, Qatar
1% Australia
Australia
1% Africa
Egypt
6% South América
Argentina, Colombia
73 Private companies
Biddings rounds9 107New
Contracts 67% Award success rate
$161 USD Billion Investment
FarmOuts3Oil Rounds
9
38 contractual areas awarded in Round 1
10
38Areas
20.4 K km2
Surface
2.5 mmmboe
ProspectiveResources
4.1 mmmboe
Remaining Volume
Plan Quinquenal
Aguas Profundas
Aguas Someras
Terrestre Convencional
Terrestre No Convencional
5 Year PlanDeep Water
Shallow Water
Land ConventionalLand UnConventional
11
50Areas
55.5 K km2
Surface
3.9 mmmboe
ProspectiveResources
1 mmmboe
Remaining Volume
50 contractual areas awarded in Round 2
Plan Quinquenal
Aguas Profundas
Aguas Someras
Terrestre Convencional
Terrestre No Convencional
5 Year PlanDeep Water
Shallow Water
Land ConventionalLand UnConventional
12
16Areas
11 K km2
Surface
513 mmboe
ProspectiveResources
164 mmboe
Remaining Volume
Plan Quinquenal
Aguas Profundas
Aguas Someras
Terrestre Convencional
Terrestre No Convencional
5 Year PlanDeep Water
Shallow Water
Land ConventionalLand UnConventional
16 contractual areas awarded in Round 3
Still remainig 5 times the number of contractual areas awarded
107 areasawarded
67% Successrate
161,000 millionUSD EstimatedInvestment
75% GovernmentTake
900 thousandemployments
501 RemainingAreas
318 conventional
183unconventional
260 kSurface (km2)
207 k conventional
53 k unconventional
43 Prospective Resources (mmmboe)
12conventional
31unconventional
RemainingVolume
(mmmboe)
38conventional
0unconventional
Surface & social assessmentDesign for tender areas
Key elements for contractual areas design
15
Indigenous regions / population Urban areas Archaeological and historical sites Rural Sites Water availability Infrastructure and urban equipment
(roads, hospitals, schools, etc.)
Prospective resources Hydrocarbon type (Oil / Gas) Original volume remaining Oil infrastructure: Wells, facilities and
pipelines G&G Information Plays (conventional and unconventional)
4. Social Aspect3. Physical aspects
Aquifers Use land and vegetation Terrain relief Water deposits
1. Regulatory aspects 2. Technical aspects
Pemex’s Entitlemnets Safeguard Areas Contracts Areas in bidding process Proctect Natural Areas Indigenous communities
Responsible and sustainable tenders for E&P
16
Surface & subsurface
analysis
What’s next on social assessments assimilation? Indigenous consultation
requirements Land utilization optimization Value chain integration Social welfare measurement Enhance public acceptance of
E&P industry
Aiming for:• Economics• Social license• Regional growth
Source. SENER Prospectiva de Petróleo Crudo y Petrolíferos 2017-2031
Best Scenario
PEP TotalAuctionsTotal
Best ScenarioShal low WaterOnshoreDeep WaterTotal
Expected crude oil production 2017-2031
17
Mexico’s upstream opening continues with two upcoming onshore rounds that offer 46 blocks, combined
18
Surface area: 1,044 mi2
Onshore Unconventional|Round 3.3| Sep 27thOnshore Conventional|Round 3.2 |Sep 27th
Surface area: 3,673 mi237 blocksblocks
Million boe of prospective resources1,4742 bidding rounds:
times the auctioned surface area of previous onshore rounds1.5
Million US$89Investment per block:
9
260 Million US$Investment per block:
1. It is necessary to maintain the rate of activity to attract the requiredinvestment to transform prospective resources into reserves in theshort-term.
2. Social license has to be maintained on top of the attention prioritiesto ensure sustainable E&P activities but as well to ensure the correctevaluation and valuation of oil and gas projects.
Final comments
19
