Wintershall Dea Establishes Full E&P Value Chain in Mexico

Q: How have the acquisition of Sierra Oil & Gas and the merge of Wintershall and DEA added value to the company’s Mexican portfolio?

A: Wintershall Dea entered Mexico in 2017 – at the time as DEA Deutsche Erdoel AG - when it was awarded operatorship of the Ogarrio oilfield in a PEMEX farmout process, along with its first offshore license. By 2018, the company was awarded more blocks in rounds 2.1 and 3.1.

At that time, the company acquired Sierra Oil & Gas, which already held six exploration licenses and discoveries. This made a great addition to our Mexican portfolio. Following this, the two German companies then merged in 2019 to form Wintershall Dea, Europe’s leading independent natural gas and oil company.

Today, we have a portfolio of 12 licenses both onshore and offshore, including material participations in the Zama, Polok and Chinwol discoveries, as well as in the producing Hokchi oil field, where we recently acquired a 37% interest.

Q: How is Wintershall Dea involved in the development of the much-discussed Zama field?

A: The Block 7 consortium for the Zama field involves three companies: Wintershall Dea, Talos and Harbour Energy. Wintershall Dea holds the largest percentage with 40%, Talos has 35% and Harbour Energy 25%. As Zama’s reservoir extends beyond the license borders and into PEMEX’s neighboring area, a formal unitization process was necessary.

This was the first unitization process carried out in Mexico. An evaluation by an independent reserves auditor resulted in an initial tract participation of 50.4 % for PEMEX and 49.6% on the Block 7 side. Subsequently, the Mexican government decided that PEMEX would be the operator of the Zama field, working to develop the field along with the three private companies.

We are focusing on actively contributing as a partner to the Zama asset to ensure that the field is developed in the most efficient timeframe and in the best possible technical manner.

Q: How are the developments of the onshore Ogarrio field advancing?

A: The Ogarrio field was acquired in 2017 as a farmout from PEMEX through a 50-50 license contract, with Wintershall Dea acting as the operator. Ogarrio is a very mature oil field which started production in the 1950s, with over 500 wells drilled in that area. Due to the nature of such reservoirs, we are now facing a production decline. Wintershall Dea has been trying to stabilize and improve production levels since we took over the operatorship in 2017. Since then, we have been working on production optimization to offset the natural production decline of the field.

Wintershall Dea is also looking into improved oil recovery operations, such as waterflooding. This project is currently under evaluation, but we have observed promising results from our pilot projects.

Q: What expertise can Wintershall Dea offer as an experienced IOC in developing Mexico’s deepwater potential?

A: Wintershall Dea currently participates in the deepwater area of the Gulf of Mexico through Block 29, where we have partnered with the Spanish company Repsol as operator. Our intention is to be always an active partner. We clearly see a benefit for a consortium by bringing our expertise to the table to develop this deepwater field in the best possible and safest way.

Wintershall Dea has extensive knowledge from other parts of the world, such as Norway, Germany and North Africa. We are always seeking to transfer this know-how to other Wintershall Dea projects around the world, including to Mexico.

Q: How is the company planning to reduce its CO2 emissions and contribute to the energy transition?

A: Wintershall Dea is actively working on these matters and the energy transition and reducing CO2 emissions are key topics for us. Achieving net zero greenhouse gas emissionsScope 1 and 2 - in all our upstream activities by 2030 is one of our goals. Carbon management and hydrogen are important pillars of our strategy, which is a logical evolution to who we are and what we can do.

Wintershall Dea has the necessary natural gas reserves, subsurface and engineering expertise, to use depleted reservoirs to store CO2 , supported by our experience in the midstream business.

Our initial focus is on North-Western Europe, where we currently see the greatest dynamic in this area and where we are already pursuing concrete projects. However, our goal is to translate that experience, know-how and technologies to other regions, including Latin America. Globally, we are working on a carbon management and hydrogen business which will reduce CO2 emissions by 20-30 million tons a year between 2023 and 2040.

Q: What are the future plans for the company in Mexico?

A: Mexico is and remains a core country for Wintershall Dea’s global portfolio. The company has a promising and attractive portfolio throughout the E&P value chain, with auspicious projects in the exploration and development stages, including Zama, our Polok discovery and ultimately the production projects Ogarrio and Hokchi.

We are currently drilling our first own operated offshore wells, the first being the so-called Kan well, and we are expecting the final results by the end of April 2023. As part of this Block 30 campaign, we will then drill back-to-back another well named Ix. In addition, we will drill more wells during 2023 and 2024 in Block 4 in the Sureste basin, with Petronas as operator, and also in Block 2 in the Tampico-Misantla region, with PEMEX as operator.

Wintershall Dea came to stay. We see a strong market for the future and we believe in the potential and opportunities to continue growing our business in Mexico.