Pemex, Mexico’s largest national oil company, has made its biggest onshore oil discovery in 15 years. The find of nearly 1.5 million barrels of crude came while drilling its onshore Ixachi well, located in the Veracruz basin. The overall field is estimated to hold an additional 350 million barrels in oil reserves.
President Enrique Pena Nieto, who made sweeping energy reforms in 2013 which ended Pemex’s decades long monopoly, made the announcement at the company’s Tula refinery last week.
This is the third major oil find announced in Mexico this year. Luckily the well is located close to existing infrastructure and full-scale production of the oil field should begin by the end of 2018.
Gonzalez Anaya, a spokesman for the company, said in a statement that the company is not yet sure whether it will develop the field by itself or seek out an equity partner.
“We’re just now announcing the field’s discovery, and still need to delimit it as well as establish a development plan” he said.
For Pemex, this discovery couldn’t come sooner as they’ve struggled with declining output and a flurry of budget cuts. Despite that and the increased competition as a result of the aforementioned energy reforms, Pemex still produces nearly all of Mexico’s crude and expects to end 2018 with an average of 1.9 million barrels per day.
In the statement, President Nieto took the opportunity to tout his reforms stating “Energy Reform, one of those that was approved and is in the process of being implemented, is enabling Pemex to be a much more productive and efficient company that can compete with any other company in the world.”
Later adding, “The fact that Pemex today is recovering and restoring its oil production platform and producing more oil is due to the efforts and commitment of Petroleos Mexicanos workers. They are the soul and strength of this great national company.”
Mexico hit peak oil output in 2014 at about 3.4 million barrels per day.
Article written by HEI contributor Kevin Abbott.