Pemex Considers Reactivating Old Wells to Boost Oil Output

Mexican state energy company Pemex plans to reopen old wells in a bid to squeeze more barrels out of them to boost declining oil production, according to two documents and four sources, as it struggles to reach an ambitious government target.

Pemex said in a filing to the United States Securities and Exchange Commission published this week that it expects production to fall to 1.58 million barrels per day (bpd) this year rather than the 1.8 million bpd officials have consistently touted.

It currently produces some 1.6 million bpd. Production for the heavily-indebted company has been declining for years as its older fields in the Gulf of Mexico, including many former star producers, are being depleted and newer fields have failed to compensate for it.

Angel Cid Munguia, the new head of the company's exploration and production arm, wrote in an internal document, dated May 6, that it was advancing with the "reactivation of closed wells" though did not elaborate on the number.

The specifics would depend on both the risk profiles of the thousands of wells across the country both onshore and offshore, and which ones could ramp up production fastest, four sources familiar with the plans told Reuters.

Pemex