Wedoany.com Report-May 9, Mexico’s state energy company, Pemex, is planning to reactivate closed wells to increase oil production, according to internal documents and four sources familiar with the initiative. The effort aims to address a decline in output and meet production goals set by the government.
The logo of Petroleos Mexicanos (Pemex) is pictured at the company's headquarters in Mexico City, Mexico July 26, 2023.
In a filing with the United States Securities and Exchange Commission this week, Pemex reported that its oil production is projected to reach 1.58 million barrels per day (bpd) in 2025, lower than the previously targeted 1.8 million bpd. The company currently produces approximately 1.6 million bpd. Output has been decreasing for years due to the depletion of older fields in the Gulf of Mexico, while newer fields have not fully offset the losses.
Angel Cid Munguia, head of Pemex’s exploration and production division, stated in a May 6 internal document: “We are advancing with the reactivation of closed wells.” The document did not specify how many wells would be targeted. Four sources indicated that the selection of wells depends on their risk profiles and potential for rapid production increases, with both onshore and offshore sites under consideration.
Mexico has over 31,000 wells, of which about one-third are closed, according to data provided to Reuters. Approximately 4,800 wells are currently operational for hydrocarbon production. One source, who has analyzed closed wells, explained: “The reactivation depends on geological information, funding, well mechanics, and the recovery factor of each well.” The wells targeted include those producing crude oil, natural gas, and condensate. Some were previously closed due to water accumulation or low pressure, requiring specialized equipment for reactivation.
Pemex is also exploring secondary recovery methods for wells in the Gulf of Mexico, including Ku, Maloob, Zaap, Akal, and Ayastil, according to two additional sources. These wells, which remain operational, could increase output with new techniques, though progress has been slowed by limited funding. In a separate document dated May 6, Cid Munguia noted: “Two people have been designated for the supervision, design, and engineering of strategic exploration projects.”
Last year, Pemex deferred up to 26.8 billion pesos (approximately $1.35 billion at the time) in spending to optimize resources, prioritizing higher-producing wells and postponing some administrative and exploration activities. The company faces challenges due to its significant debt, which has impacted the pace of these initiatives.
In Mexico, regulations require that closed wells be safely sealed to prevent environmental risks. However, petroleum engineers and reservoir geologists have noted that some closed wells may still affect the environment, with reports in 2022 highlighting impacts on communities in Chiapas.
