Mexico is drilling again

Houston Chronicle:

The oil boom’s still booming in this sweat-stained patch of eastern Mexico, where Houston companies are helping to drill some 17,000 wells for Mexico’s national oil company.

Desperate to replace the millions of barrels of crude per week it has lost from dying offshore fields, Pemex intends to drill in the foothills surrounding this town and stretching far to the north. It has hired Schlumberger, Weatherford International and other Houston companies to do much of the work, awarding them contracts in recent weeks worth nearly $1.5 billion.

With global business plummeting along with oil prices since last summer, Pemex’s gambit has proved a godsend to the companies.

Mark Brown, an oil industry analyst with Pritchard Capital Partners in New York, said: “Drilling is getting creamed in the United States and Canada. This does offer a bright spot in that overall bleak environment.”

Pemex’s bet on the Chicontepec fields is something of a Hail Mary pass fraught with challenges, Brown and other analysts say.

So far, Chicontepec’s production has reached just under half the 72,000 barrels of petroleum per day that planners hope for this year. But Pemex promises to increase the field’s production to more than 700,000 barrels per day within the next eight years.

“A lot of people think that Pemex will have difficulty achieving the targets,” Brown said. “But at least they’re putting their best foot forward.”

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Unlike the Obama administration Democrats who are still trying to strangle domestic production while they throw money at magic energy. We have significant domestic production that we could be working on if the Democrats would get out of the way.