Pemex Considers Reactivating Old Wells to Boost Oil Output
May 9, 2025
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 did not immediately respond to a request for comment.
Mexico has more than 31,000 wells both onshore and offshore, and about a third of them are closed, data shared with Reuters showed. More than 4,800 wells are considered to be "operational" for hydrocarbon production.
The reactivation depends on geological information, funding, well mechanics, and the recovery factor of each well, said one of the sources, who has studied closed wells in detail.
The documents lacked detail on what exact technology would be used to reactivate old wells but companies operating in other mature fields around the globe have used specialized expensive equipment to keep bringing hydrocarbon products to the surface even as production slows.
The wells being considered for this strategy are for crude oil, natural gas and condensate, said another one of the sources, who works at Pemex, adding plans had advanced slowly because of tight budgets at the highly indebted company.
Some of these wells had been closed because they filled with water or had presented too low pressure, which made production challenging because more specialized equipment was needed, the source added.
Pemex had for the past months also been working on plans for extensive secondary recovery methods for wells in the Gulf of Mexico, including Ku, Maloob, Zaap, Akal and Ayastil, two other Pemex sources who worked on a separate plan with the same aim of boosting declining production.
While these wells do not have to be reopened, using new production methods, they could potentially produce much more, the two sources said, adding that in part the projects have not moved forward because of a lack of funds.
In a separate document dated the same day, Cid Munguia wrote that two people had already been designated for the supervision, design and engineering of strategic exploration projects.
Cid Munguia returned to his post last week after the surprise departure of Nestor Martinez, a former senior official at the hydrocarbon regulator who had been appointed by President Claudia Sheinbaum in October.
Last year, Pemex sought to defer up to 26.8 billion pesos (then worth $1.35 billion) of spending in an attempt to "optimize resources" in its exploration and production arm.
Pemex then argued it would prioritize investments in higher-producing wells and defer some administrative and production work, including covering wells and acquiring seismic equipment needed for exploration.
In the past, there have been concerns over the management of closed and abandoned wells. It is a legal requirement in Mexico to safely shut wells that are no longer producing and ensure they do not pose a risk to air, land and water.
Even so, petroleum engineers and reservoir geologists have repeatedly told Reuters that some closed wells are having a detrimental impact on the environment.
Reuters in 2022 reported on how some of these wells were impacting populations in the poor southern state of Chiapas.
(Reuters - Reporting by Stefanie Eschenbacher, Adriana Barrera and Ana Isabel Martinez; editing by Stephen Eisenhammer and Marguerita Choy)
