The danger of high water production lies in the fact that, on many occasions, this causes the assets to shorten their production life or that some fields are closed.
Until last July, Xanab was the third most important field for Pemex, behind Maloob and Zaap. A month later it was moved to fourth place, behind Ayatsil, a field that only started production in 2015.
The production drop in Xanab is not something new. The state company was sanctioned for more than 24 million pesos by the National Hydrocarbons Commission in 2018 for failing to comply with the development plan and causing a fracture process that accelerated the entry of water. In 2019, the asset’s production fell dramatically to 26,000 barrels per day after reaching production above 170,000 barrels per day.
Now analysts fear that the state company is drowning the countryside again and the figures confirm the fears.
“After that (causing the fault that flooded the field) they had good damage management and were able to salvage it. They invested a lot of money in it because most of the wells that were filled with water are no longer useful, they had to drill other wells a little higher up. They closed many wells, drilled new ones, but now production is falling again,” says Eduardo Gutiérrez, an analyst at IPD Latin America consulting firm.
Analysts agree that Pemex’s strategy to accelerate crude production to maintain the presidential speech explains the increase in water in the asset and the decline in crude oil extraction.
The deposits have a natural layer of water that sits below the oil – after many years of processing. Many times when the extraction process is accelerated, the water breaks through the crude layer and then the operators increase the production of the liquid and that makes it difficult to take advantage of the oil.
Water production has become a common problem for the state company. According to regulator figures, the Esah field –which is one of its priorities– also reports a high production of water and a decline in crude oil.