REACTIVATION OF MATURE FIELDS IN NORTHERN MEXICO.
Authors: Ing. Antonio Narváez, PEMEX Exploration and Production
Dr. Luis Roca Ramisa, Schlumberger Oilfield Services
Copyright 2005, CIPM. Este artículo fue preparado para su presentación en el cuarto E-Exitep 2005, del 20 al 23 de febrero de 2005 en Veracruz, Ver., México.
El material presentado no refleja necesariamente la opinión del CIPM, su mesa directiva o sus colegiados. El artículo fue seleccionado por un comité técnico
con base en un resumen. El contenido total no ha sido revisado por el comité editorial del CIPM.
RESUMEN
Los campos maduros y/o marginales en México se
definen como aquellos que el margen de utilidad,
aunque rentable; no son suficientemente
competitivos con otros proyectos de PEMEX
Exploración y Producción. El concepto de madurez
y/o marginalidad es dinámico; es decir, puede ser
temporal en función de las condiciones de
mercado y nivel de costos de extracción y
producción. En los EUA, se considera como
maduro y/o marginal, aquellos campos de aceite
con producciones inferiores a 10 bpd por pozo
(IOGCC).
En el Activo Integral Poza Rica-Altamira existen
más de 12 campos de aceite que son
considerados como maduros y/o marginales; sin
embargo, y poseen todavía una cantidad
considerable de reservas 2P y tienen factores de
recobro históricos promedio relativamente bajos
(>5%). Estos campos fueron descubiertos a lo
largo de la década de 1990 y tienen actualmente
producciones que oscilan entre 3 y 55 bpd por
pozo. Con un enfoque adecuado, estos campos
pueden ser reactivados económicamente y ser un
detonante para el re-surgimiento de la Región
Norte como productora neta de aceite.
En este trabajo se presentan los retos y planes
diseñados por la Región Norte para la re-
activación de estos campos, así como también las
experiencias con campos maduros y/o marginales
en otras partes del mundo.
ABSTRACT
Although profitable, Mexico's marginal fields are
those whose profitability is not competitive with
other PEMEX Exploration and Production projects.
The concept of marginality is dynamic in that it is a
function of market conditions and lifting and
production costs. Mature fields could be also
marginal, but the term is applied strictly to those
fields that have passed their peak production.
Fields producing less than 10 bbl/d are considered
marginal In the U.S. (IOGCC).
There are 12 oilfields considered marginal or
mature in the Poza Rica-Altamira asset in
Mexico's North Region. Nevertheless, these fields
still have considerable 2P reserves, but their
average historical recovery factors are relatively
low (< 5%). These fields production started in the
early 1990s. Today, production from these fields
averages between 3 and 55 bbl/d. These fields
could be reactivated economically and therefore
serve as a springboard for Mexico's North Region
to again become a net oil producer with
comprehensive study, properly applied technology
and a shift in the use of human resources.
This paper discusses the challenges of reactivating
the North Region and presents plans for doing so.
Experiences with marginal or mature fields in other
locations are cited as a backdrop for this study.
INTRODUCTION
The main driver of the oil industry continues to be
the demand for oil and gas, which is expected to
grow at a cumulative rate of 1.8% from 2001
through 2025 (Fig. 1).2 Despite the projected
growth in demand, production in the world's
remaining proven reserves has peaked in many
areas and will peak in others within the next 10
years.
Fig. 1. World energy demand.
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Remaining reserves are in a limited number of
countries. With the exception of the harsh
deepwater environments, future new exploration
and growth will happen mainly in the Eastern
Hemisphere. Figure 2 illustrates the peak
discoveries in different areas around the globe.
Fig. 2. Oil reserves distribution.
The larger bubbles, representing remaining oil
reserves in MMbbl, appear mainly in Eastern
Hemisphere countries.
Peak production in remaining reserves will peak in
the next 10 years, which means the E&P industry
will become more production based over time. This
scenario points to the importance of increasing
production in marginal fields and prolonging it in
mature fields where economically feasible.
Although new discoveries, new technologies and
new evaluations will come into play, the overall
scenario will not change significantly. In Mexico,
where oil production is a key element of the
country's continued economic growth, production
from marginal and mature fields will play an
important part in its future fiscal well-being.
Twelve oilfields in Mexico's North Region—the
Poza Rica-Altamira asset—are considered
marginal or mature. The term marginal, which can
be applied to any oilfield, is dynamic in that it is a
function of market conditions and lifting and
production costs. Mature fields are marginal, and
are further distinguished by the fact that they have
already passed their peak production. These 12
oilfields, which were put on production in the early
1990s, were unprofitable until 1996. After that time,
gas profitability has remained good to excellent,
but profitability from the production of oil, which
peaked in 1996, has been significantly less
impressive (Fig. 3).3
Fig. 3. North region's profit per business type.
Today, average production from the Poza Rica
asset is 70 bbl/d; it is 40 bbl/d from the Altamira
asset. Overall production from the North Region is
100 bbl/d. These intermittent wells also produce a
high percentage of water. Despite the declining
trend in production, Poza Rica-Altamira reserves
have significant remaining value, with 2P reserves
at 5531 MBOE for the Poza Rica and 4881 MBOE
for Altamira. In general, several difficulties must be
overcome for these fields to be profitable:
decreasing production, high production costs,
excess personnel and a low level of financial
investment.
Several scenarios could be considered with regard
to administering these mature and marginal fields.
These fields could be closed, but such a move
would demand huge financial resources and would
mean the loss of any profit. Therefore, closing the
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12 fields in the Poza Rica-Altamira asset is not
practicable. Reactivating these fields could
significantly reduce operations costs and therefore
improve profitability. This would appear to be the
best option, yet challenges remain. First, human
resources are the variable with the greatest impact
on cost. The scope and focus of the workforce in
this area would have to be shifted to economically
support a reactivation scenario. Second, a
substantial improvement in performance would
require a step-change in how decisions are made
with regard to these fields. Third, reactivating these
fields will require the application of fit-for-purpose,
cost-effective technology that will increase ultimate
recovery through extended field life.
NORTH REGION BUSINESS FRAMEWORK
In 2003, North Region 3P reserves represented
43% of the PEMEX Exploration and Production
total 3P reserves. Despite this high percentage,
income from this region accounted for only 8% of
the income from total PEMEX wells in operation.
Investments made in the North Region to date
totaled $2 billion USD, or 27% of the PEMEX total,
and North Region workers accounted for 27% of
the total PEMEX Exploration and Production
workforce. The disparity in these numbers points to
the need to make significant changes in how and
where workers are distributed, and in how critical it
will be that future investments are highly targeted
to meet specific production and income levels. In
addition, an unfavorable fiscal regime in Mexico
further necessitates that production in the mature
Poza Rica-Altamira be carried out in the most
efficient manner possible—in a way that ensures
future profitability.
In the Poza Rica-Altamira asset, support staff
makes up a higher percentage of the workforce
than do well operations staff. A significant share—
42%—of the total 3170 workers are used in
maintenance in the Poza Rica; in the Altamira,
34% of the total 1992 workers are working at the
administrative level. In each case, essential areas
related to well operations are being covered by
only about 40% of the total workforce. This
imbalance must be remedied in coming years with
a focused strategy for efficiently allocating human
resources. In other words, labor as a variable
factor must be brought into alignment with
production.
While more fields are becoming marginal (26% in
2004, up from 11% in 1996), investment and
production have dropped along with increased
costs, volatile prices and lower profits. These
areas must be balanced in order for reactivation of
the North Region fields to be a step in the right
direction.
NORTH REGION GEOLOGICAL
CHARACTERISTICS
The geology of Mexico's North Region—
specifically, the Ébano-Pánuco area—serves as an
example of the type of geology encountered in
similar mature fields such as the Poza Rica-
Altamira. Heavy oil production in the Ébano-
Pánuco comes from fractures in the Cretaceous
San Felipe and Agua Nueva formations. The
reservoir rock is a Cretaceous carbonate
composed principally of fine-grained limestone with
varying amounts of detrital shale. Four lithotypes
are volumetrically dominant: argillaceous lime
mudstone (shaly limestone), detrital shale
(calcareous shale), chalk (clean, fine-grained
limestone) and Argillaceous mudstone.4
These lithotypes change vertically with
stratigraphic position and laterally with geographic
location. In general, the rocks become more shaly
toward the west.
Core samples taken in the Ébano-Pánuco reveal
low but measurable values of porosity, ranging
from 0.4 to 18%. In more than 60% of the thin
sections, the pores are too small to be seen with a
petrographic microscope (micropores). Because of
this small pore size, the overall matrix porosity and
permeability are relatively low to low. Lithotypes in
the San Felipe and Agua Nueva formations have
lower values of porosity (3.75 to 7.5%) and
permeability (0.008 to 0.0a mD) due to the
presence of detrital shale mixed with micrite
grains.
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Water saturation is uniformly high in the most shaly
rocks because the throats of the matrix pores are
very small. The irreducible water saturation is very
low (15%) in the porous and permeable chalk
intervals.
Fracture porosity is very important in the area
because of the low total volume of matrix porosity.
Virtually all the fractures in the rocks are of tectonic
origin, and at least two stages have occurred in the
rocks, both producing vertical fractures. The
vertical seal is provided by the Mendez and
overlying Tertiary formations. Log evaluations have
shown that the Mendez contains a significant
quantity of shale. The basal part of the Mendez
formation contains a higher proportion of limestone
than the upper part, and it is likely that some
locations in the lower Mendez contain fractures
that may act as a Type 1 reservoir.
Oil gravity in the Ébano-Pánuco ranges from 11 to
14 API, with viscosities ranging from 1200 to 8000
cp. This area has produced approximately 1 billion
barrels of oil from several different sectors. Some
wells in the area still produce by natural flow, but
water production is a major problem in these
reservoirs where water has coned upward through
the natural fractures.
STRATEGIES AND PLANS FOR REACTIVATION
Obviously, the objective of boosting reactivation in
the North Region is to significantly increase
production. Opportunities abound for PEMEX
Exploration and Production to ensure that mature
North Region fields become net producers.
Exploration in geologic basins associated with
these fields must be carried out to identify
additional areas that are ripe for development.
Appraisal of these fields would include seismic
studies and identifying strategic wells that are
candidates for reentry. Development of mature
fields could include directional drilling, where
appropriate. Fields and wells would be optimized
by artificial lift systems and water control
measures. Secondary and tertiary recovery would
also be considered.
A focused and ongoing human resources strategy
will be a key part of profitable reactivation to
ensure that labor as a variable factor directly
relates to production. Without such a strategy,
costs might reach $35 per barrel in 10 years as
Poza Rica-Altamira production declines. Key
elements of this strategy would include:
• relocating employees to more productive
areas
• modifying work shifts and improving labor
relations
• transferring jobs to expanding business
units, inside or outside PEMEX Exploration
and Production
• establishing incentives for performance
linked to increased production and lowered
costs.
Targets for linking the size and processes of
technical and administrative staff support areas to
operations will have to be reset to levels that are
more in line with production. Currently, 65% of staff
works in support areas in the Poza Rica-Altamira.
Reducing that number to 30% would reduce costs
significantly. To fill in the gaps resulting from this
reduction, training should be offered to improve
personnel skills in design, drilling and operations of
wells and installations. State-of-the-art information
technology and telecommunications equipment
should be put in place to reduce the time
personnel currently spend in managing data and
transmissions. Where possible, maintenance,
personnel, accounting and other support areas can
be relocated within PEMEX or outsourced to move
resources to areas more essential to reactivation
activities.
Along with a human resources strategy, the
operation and management of wells should be
expanded and automated where appropriate.
Since these activities require substantial manual
labor, energy and maintenance, steps must be
taken to optimize management activities.
Capacities for separation, storage, pumping,
transport, injection and compression must be
gradually resized, and controls can be
implemented to measure and handle fluids
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automatically and remotely. Crude oil pumping
activities can be streamlined to take advantage of
the large storage and pumping capacity already
available in the Poza Rica-Altamira.
Funding is another area where projects in mature
fields are at risk. Without revising the fiscal regime
and the Law of Financing and Public Expenditure,
there are options for strengthening the sourcing for
financing mature fields. First, reasonable and
appropriate baselines—particularly for costs—
should be established for evaluating projects.
Second, assistance can also be gained by
designating multiannual financial resources for
mature fields, without restricting these funds to
present technical limitations. Third, arrangements
could be made with the federal government to
permit PEMEX to use financial reserves for
reactivating those fields with the most oil and gas
reserves. Finally, peer groups (competing among
equals for financial contracts) could establish the
financial budget as is done by other E&P operating
companies.
PUTTING ADVANCED
TECHNOLOGY TO WORK
Overall, Mexico's oil industry must come to rely on
technology that lowers lifting costs so that
marginal, mature fields become viable. Making use
of and developing new fit-for-purpose, cost-
effective technology and services is essential to
retarding the decline in performance of the world's
production base, while concurrently increasing
ultimate recovery through extended field life. In
addition, digital technologies must become more
central to providing an infrastructure that
maximizes the value of specialists and their
knowledge to improve the overall efficiency of
reactivating mature fields.
Currently, there are a number of ways where using
appropriate technologies can add significant value
to mature fields. Production and reservoir
management tools can more accurately describe
and control production for long-term economic
benefit. For instance, mutiphase flow metering Vx*
technology allows the simultaneous measurement
of oil, gas and water flow without fluids separation,
which typically requires bulky separator equipment.
The Wet Gas module of Vx permits measurement
of condensates, an important capability where both
oil and gas wells are produced or where the
production character changes over time. In
general, production metering lowers overall costs
by providing quick, efficient well tests and early
water detection.5
Cost-effective well construction is another area
where specific technologies can help lower overall
well/field construction costs and access greater
reserves per well. In the Burgos basin, for
example, the Drillers Technology Corporation
(DTC) uses its telescopic double rigs to improve
drilling efficiency. The performance record set the
bar for drilling in the Poza Rica-Altamira. For
example, the average drilling time was 10.68 days,
with the best time at 9.09 days (drilling times
adjusted to total well depth of 2000 mV). Best
average ROP in an 8 1/2-in. hole section was 31.3
m/hr; in a 6 1/8-in. hole section the average was
22.9 m/hr. Nonproductive time (NPT) was reduced
from 14.63% to 2.88% between drilling the first and
second wells. With lessons learned in the Burgos
basin, similar achievements can be expected with
DTC rigs in the Poza Rica-Altamira to lower drilling
time and costs.
Fig. 4. Schematic diagram of a DTC telescopic
double rig.
5
New techniques for reentry, stimulation and
intelligent completions can ensure that the value of
mature fields be fully realized. In the past, reentries
have often been hampered by small hole sizes. A
new technique, called TTRD*, or Thru Tubing
Rotary Drilling, combines small high-torque motors,
reliable high signal strength MWD and
sophisticated multicurve resistivity systems. TTRD
technology has demonstrated that sidetracks of up
to 25,500 ft can be drilled at good penetration rates
to targets once considered uneconomical. This
technology also provides the ability to "daisy chain"
targets, a capability that will surely forestall the
decommissioning of existing infrastructure until the
reservoir is totally drained.

With the Rapid* service provided by some

technical companies, wells can quickly be
identified as candidates for stimulation. This time
savings translates into reduced rig time and costs.
Once these wells are identified, a fiber-based fluid
fracturing technique has been shown to fully
distribute within the fracture. This full-height
packing of the fracture effectively increases the
surface area open to flow. The difference in well
productivity can be considerable.

Intelligent completions, such as those applying

one-trip ESP completions and creating a large
zonal pressure and flow differential, will mean that
fewer wells must be drilled. They also allow for
better pressure management, reduced water
production and improved recovery rates. Fig. 5. Axia* fit-for-purpose integrated lifting
system.
Other cutting-edge, reliable and proven technologies
have been used in Mexico's Chicontepec basin.
These innovative technologies have set the standard • Well trajectory planning with 4D seismic—
for improved production and cost management, and A new seismic technology that acquires
may demonstrate the efficacy of their application in data digitally, avoiding the signal averaging
Mexico's mature fields in the near future. Among applied in conventional seismic, for much
these technologies are quicker processing that can more
accurately plan the well track to avoid
• Axia-Production Management—A fit-for- water contact and improve production.
purpose downhole pumping system with
improved reliability and simplified field
operations, and the Axia lifting service that
delivers real-time pump data via a web
browser to monitor well operations.

6
 • Deep reading measurements—A new
cross-well resistivity that measures
resistivity across thousands of feet to
provide a "view" of often missed reservoir
features such as bypassed oil and water
fingering, and to proactively manage and
produce reservoirs and infill drilling
programs; when combined with controlled
source electromagnetic and
magnetotelluric surveys, yields a resistivity
map of the reservoir.

• ABC* Analysis Behind Casing—Provides a

full range of openhole-quality
measurements in wells after they are
cased to reveal the effects of production
on reservoirs, such as water
encroachment and depletion, where rig
efficiency is of critical importance to the
economic success of a mature field drilling
program.

Fig. 6. Well trajectory planning with 4D seismic.

Fig. 7. Deep reading measurements.

Fig. 8. ABC* Analysis Behind Casing.

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 • Well construction for mature fields—
Services that can link multiple small
accumulations with a single wellbore by
reducing the number of wells/slots, and
that can access small single targets,
resulting in reduced well costs, accurate
well placement, increased step-out
capability, and higher steering capability.
Fig. 9. Drilling in complex reservoirs require
excellent steering capabilities.
FloScan Imager*—Deploys sensors across the
wellbore to measure holdups and velocities at any
point in the well to provide a flow profile and an
understanding of exactly which zones in the well
are producing and what they are producing.
Fig. 10. FloScan Imager* (FSI) System.
EXPERIENCES WITH MATURE FIELDS
Mature fields in Mexico's North Region will
ultimately benefit from lessons learned in mature
fields in other parts of the world that have had
successful reactivation programs. Important
technologies have been applied with considerable
success in these key areas:
• Effective processes to quickly identify wells
that are candidates for production
enhancement
• Logging techniques that assist in building
the complete petrophysical picture of
hydrocarbon zones behind casing in
existing wells
• Accurate well placement to ensure long-
term production
• Efficient well construction that maximizes
drilling performance, improves penetration
rates, avoids existing slot/well preparation,
and reduces hole size and drilled length—
all to improve the economics of well
reactivation.
A scenario parallel to the Poza Rica-Altamira
exists in the Chicontepec fields within the North
Region. In its first year of reactivation activities,
this field is on track toward increased production
and profitability. This field has the largest 3P
hydrocarbon reserves in Mexico—18,129 MMBOE.
Within one year of applying a reactivation program
to this field, 25 km of roads have been built, 12
platforms set, 81 wells drilled with 58 completed,
55 km of pipeline laid, and a 3.3-km pumping
network installed.
To reactivate the Chicontepec fields, a new
approach was taken that called for
• Appraisal of fields with seismic activities to
identify strategic wells for reentry
• Development of fields via directional hole
• Optimization of fields and producing wells
using artificial lift systems and water
control
• Secondary and tertiary recovery schemes.
8
Overall, average oil production currently stands at
50 bbl/d per well. Over the next 25 years, 13,372
wells will be drilled with an expected oil production
between 600 and 700 bbl/d and gas production
exceeding 700 MMft3/d.
CURRENT ACTIVITIES TOWARD
REACTIVATION OF THE POZA
RICA-ALTAMIRA
Success in the Chicontepec has paved the way for
new activity in the Poza Rica-Altamira, and much
has already been done to begin a successful
reactivation of this asset. To date, a
multidisciplinary team has been formed to look at
all aspects of the project. The marginal fields have
been ranked in terms of the status of their
development, optimization of artificial lift systems
and the production infrastructure. Companies
having experience in marginal fields have been
consulted, along with consultants in specialized
areas from academia and other corporate
institutions. A financing plan has been put
together, along with payment arrangements. Better
labor relations have already been initiated.
The team has also set forth a list of services that
would optimally be contracted outside PEMEX
Exploration and Production. Among these are
converting wells to optimized artificial lift systems;
reengineering of production installations;
negotiating permits for rights of way; workovers;
handling produced water; administration and
maintenance of installations and the infrastructure
of production, just to name a few.
CONCLUSION: FINDINGS AND CHALLENGES
AHEAD FOR POZA RICA-ALTAMIRA
The Poza Rica-Altamira, like other mature fields,
faces great challenges due to high production
costs, excess personnel, low levels of financial
investment and decreasing production. Despite
these challenges, mature fields have important
reserves, installations, opportunities, experience
and personnel skills. In addition, geologic basins
associated with mature fields have good remaining
potential for development that could greatly affect
overall outcome.
A successful strategy going forward will include
pinpointing those reservoirs with remaining
potential that can produce with a margin over the
cost to extract. Once identified, they must be
managed in such a way that they are no longer
losing value. The application of fit-for-purpose
technology, reallocation of human resources to
take greatest advantage of personnel talents, and
allocating financial resources to cover the special
needs of these fields will be required to increase
and prolong production from these important North
Region assets.
ACKNOWLEDGEMENTS
The authors wish to thank PEMEX and
Schlumberger for the permission and support to
publish this paper.
REFERENCES
1. Marginal Oil and Gas: Fuel for Economic
Growth, IOGCC, 2003.
2. BP Statistical Review of World Energy, June
2004.
3. Antonio Narváez Ramirez, 2004 "Management
of Mature and Marginal Fields: The Chicontepec
Success," presented at the SPE Mature Fields
Forum, Denver, Colorado
4. Caracterización de Yacimientos, Área Ébano-
Pánuco, Veracruz, México, reporte interno de
PEMEX Exploración y Producción, 1998.
5. Burgos Review, Schlumberger Publication,
2002.
6. Satish Pai, "Lifting Our Game: Technology in a
Mature Fields Environment," 2004 presented at
AAPG, Cancun, Mexico.
Note: An asterisk throughout this document
denotes a mark of Schlumberger.