Pemex and Petrobras Embark on High-Risk Venture to Extract Oil from 160 Million-Year-Old Rocks
Pemex and Petrobras are joining forces to explore a layer of the Earth's crust beneath the Gulf of Mexico, seeking to extract oil from rocks that have been undisturbed for 160 million years. The project poses significant physical, financial, and environmental risks, but the potential rewards are substantial.
The two largest oil companies in Latin America, Pemex and Petrobras, are undertaking a high-risk project to extract oil from rocks that have been buried for 160 million years. This venture is a desperate attempt by Pemex to revitalize itself, given its crippling debt, declining oil production, and reputation for inefficiency and danger.
## Background on the Project The target is a geological formation off the coast of the Mexican state of Campeche, which Pemex explored unsuccessfully in 2018. This formation is significantly older and deeper than existing oil fields, with the potential to be richer in oil. The rocks in question are eight times older than those found in oil fields on the US side of the Gulf of Mexico, which were formed around 20 million years ago.
In contrast, Pemex and Petrobras are seeking to tap into formations from an era when dinosaurs and prehistoric mollusks dominated the land and seas. The incentive to drill into these older formations lies in their potential to generate greater profits, as they constitute the source rock where organic matter was crushed, cooked, and transformed into oil.
## Challenges and Risks The risks associated with this project are enormous, given the challenges of drilling into unstable and high-pressure rock formations kilometers beneath the seafloor. The physical, financial, and environmental risks are significant, and the project's success is far from guaranteed. According to Mark Rowan, a geologist and consultant, Pemex lacks the technology and capital necessary for this type of exploration. However, he notes that the potential rewards are substantial, and companies are willing to take risks to be pioneers in this field.
The following table compares the key characteristics of the oil fields on the US and Mexican sides of the Gulf of Mexico:
## Potential Outcomes If successful, this project could be a game-changer for Pemex, which has been struggling to revitalize its production. A discovery comparable to Petrobras' Tupi field, which was found in 2006, would be the most significant development in Pemex's 88-year history. It would also contribute to the goal of successive Mexican presidents and Pemex executives to revitalize the country's oil production, which was once the crown jewel of the economy.
The exploitation of presalt reserves in Brazil has led to a significant increase in oil production, transforming the country into a hemispheric energy powerhouse. The Tupi field alone has produced 4 billion barrels of oil since it began operating in 2010, representing an economic value of over $300 billion. According to Jon Blickwede, a geologist and owner of Teyra GeoConsulting, if Pemex finds indications of hydrocarbons beneath the salt, it would be extremely important. However, the outcome of this project is far from certain, and the risks and challenges involved are substantial.
