Chapter 10 - A Crash Program in Mexico's Bay of Campeche

Abstract

This chapter offers information on Brown & Root's new offshore business in Mexico's Bay of Campeche. The demonstration effect of Brown & Root's pioneering efforts worldwide, and in the North Sea in particular, earned the company new offshore business in Mexico in the late 1970s. Mexico's oil production declined and its reliance on imported crude oil had risen. Mexico's "crisis in self-sufficiency" motivated Petroleos Mexicanos (PEMEX), the state oil company, to explore for new sources of domestic oil reserves. In 1977, President Jos Lopez Portillo staked his new government's oil development strategy on suspected sources of oil offshore in Mexico's Bay of Campeche. PEMEX had developed wells during the late 1960s and early 1970s offshore Tuxpan, but in the fall of 1975, the company announced that it had encountered signs of significant oil and gas from cretaceous structures tapped by a wildcat well, Chac No.1, drilled 43 miles north of Ciudad del Carmen in the Bay of Campeche. Brown & Root's scheduling ability was one of the qualities that had convinced PEMEX to contract with the company for the Bay of Campeche development. The chapter includes the incident of “Ixtoc Blowout” and mentions that in the early hours of the morning, the “Sedco 135” semi-submersible, leased to PEMEX, had been drilling a delineation well called Ixtoc-1 at 11,863 feet under 150 feet of water. At around 3 a.m., escaping gas from the hole spread to the hot pump motors on the rig and ignited. To contain the spill, PEMEX implemented "Operation Sombrero." Operation Sombrero was an innovative solution from Brown & Root to capture oil from the blowout. Engineers suggested placing a large, inverted funnel over the wellhead. In the span of four years, Brown & Root and its joint ventures in Mexico—Proyectos Marinos and the Corporacion de Construcciones de Campeche—had developed crude oil production from the Bay of Campeche to two million barrels per day, making the area one of the most prolific in the world. Though it did end in a failure it was an innovative try. The Bay of Campeche was one of the last major offshore oil developments in the world before the oil-price collapse of the mid-1980s ushered the offshore oil industry into the doldrums.