Sun, Nov 05, 2017 - Page 16 News List

Mexico discovers ‘major’ oil find

NEW LIFE:The 1.5 billion-barrel discovery is the biggest in the past 15 years for Petroleos Mexicanos, the state-owned Mexican oil company, which has been in decline

AFP, MEXICO CITY

Workers stand at the Petroleos Mexicanos Miguel Hidalgo Refinery in Tula, Hidalgo, Mexico, on Friday.

Photo: Bloomberg

Mexican President Enrique Pena Nieto on Friday said state oil company Petroleos Mexicanos (Pemex) has made a “major” oil and gas discovery with an estimated 1.5 billion barrels of crude equivalent, its largest onshore find in 15 years.

The new field, dubbed Ixachi-1, is located in the eastern state of Veracruz near existing Pemex infrastructure, meaning it can be tapped “relatively soon, and at low costs,” Pena Nieto said.

The estimated volume makes it “the largest onshore find the company has made in the past 15 years,” he said to applause from invitees at an event in the central state of Hidalgo.

The field’s proven, probable and possible reserves — an estimation of the amount of oil and gas that can be brought to market near-term — are 350 million barrels, the president said.

Pemex said the size of the find might prove to be larger, or even double.

However, industry experts urged caution.

“It’s very early to talk about reserves... More work needs to be done to see how big it is,” said Gonzalo Monroy of Mexico City energy consultancy GMEC.

Although, any new find is good news for Pemex, Mexico’s largest company, which has struggled with declining production in recent years, he said.

“Pemex has discovered that there is still considerable exploration potential” in Mexico, he said. “That is good news for private industry and for the country.”

Mexico enacted a landmark energy reform in 2014 that reopened the oil and gas sector to foreign investors after 76 years of state monopoly, seeking to breathe new life into it.

As a result, Pemex now faces private competition.

It reported a loss of US$5.3 billion in the third quarter, as production fell by 12 percent from the same period last year, to 1.9 million barrels per day.

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