Copyright of the Daily Oil Bulletin 2017
Renaissance Aiming To Unlock Mexico Potential
The chief executive of the Canadian-based company that has become one of the most aggressive participants in Mexico’s oil and gas production sector says he believes the company will eventually unlock millions of bbls of oil from a shale block it will likely begin producing from next year.
Craig Steinke, CEO of Vancouver-based Renaissance Oil Corp., told the Daily Oil Bulletin he believes the deep Upper Jurassic shales in its Amatitlán block and in the adjacent Pitepec block, located in the southeastern state of Veracruz, has the potential to be a “company maker” with as much as 250 million bbls the company could eventually produce from both.
“We expect to drill our first well in the Upper Jurassic in the first quarter of next year,” he said. “The big prize for us is the Upper Jurassic. You can see the rock. It’s the same rock, if not better than the Eagle Ford, but it’s three times as thick.”
Renaissance announced earlier this year it had partnered with Russian energy giant Lukoil in the Amatitlán block, the 62,000 acre play where it announced it had begun a series of workovers (DOB, Nov. 14, 2017).
Renaissance announced this past February it had partnered with Lukoil to acquire a 25 per cent interest in a contract to develop the 230 square kilometre Amatitlán block. The company holds an option to increase its interest in the block to 62.5 per cent, upon successful development. At the time it mentioned that it saw “significant resource potential” in the Upper Jurassic shale.
In the interview with DOB Steinke expanded on that potential.
He said the shallower Chicontepec is not the ultimate prize for Renaissance.
That reservoir, which Pemex has tried to unlock for many years, has achieved production of about 65,000 bbls/d, after the company spent more than US$1 billion from nearby blocks, in the larger Tampico-Misantla Basin.
Steinke said, while “there’s lots of oil there” in its slice of the Chicontepec, the maximum potential might be several thousand bbls a day.
When combined with production from its existing blocks in the state of Chiapas, to the south of the Tampico-Misantla, that would make Renaissance a significant producer in the country.
The company, which two years ago became the first private sector company to begin producing oil and gas in the country, now produces about 1,600 boe/d from its Mundo Nuevo, Topen and Malva blocks in Chiapas, where it has 100 per cent ownership.
Steinke said Renaissance believes it has the potential to achieve production of 5,000 boe/d from those blocks.
Steinke said it’s the Upper Jurassic where the company sees the potential to become a large shale oil producer.
“We think we can produce 1,200 barrels of oil daily from each well we drill there,” he said. “We think we can eventually drill hundreds of wells there.”
He said the company estimates there is 6.2 billion bbls of oil-in-place in the Upper Jurassic in its Amatitlán block.
“We think we can produce eight per cent of that,” he said. “That’s about 500 million barrels and our share could be more than 250 million barrels.”
In addition, in a press release the company issued on Sept. 7, Renaissance announced it had entered into an option agreement and technical service agreement with Mexican-based oilfield service company Constructora y Perforadora LATINA to develop Pitepec (DOB, Sept. 7, 2017).
Pitepec, which was discovered in 1943 and which Renaissance said is “largely undeveloped” has achieved daily production of 1,075 bbls/d of light crude, after Latina drilled 21 new Chicontepec wells since 2016. Mexico’s Comision Nacional de Hidrocarburos, the body overseeing the country’s energy reform process, estimates Pitepec holds 6.4 billion bbls of oil and 2.5 tcf of natural gas.
Steinke said Renaissance believes the Upper Jurassic in that block holds the same potential as in its Amatitlán block.
He said Renaissance expects to launch an aggressive development plan for both the Chicontepec and the Upper Jurassic on both the Amatitlán and Pitepec blocks in the next year or two.
The company has some of the pioneers of shale oil and gas development in North America on its technical team and Steinke said they are confident that the Upper Jurassic holds world-scale shale oil and gas potential.