Mexico’s national oil company Pemex has made its biggest onshore oil discovery in 15 years with a find in the eastern state of Veracruz, President Enrique Pena Nieto said on Friday.
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Pena Nieto said Pemex made the discovery by drilling its onshore Ixachi well, near the municipality of Cosamaloapan, and that the overall field is believed to hold some 350 million barrels of proven, probable and possible reserves.
Pena Nieto, who pushed through Congress a sweeping energy reform in 2013 that ended Pemex’ decades-long monopoly, made the announcement at the company’s Tula refinery.
He was flanked by his energy minister, Pemex’ chief executive and a range of other government and union officials. While crude export revenue once contributed as much as 40 percent of government revenue, that figure has dropped to under 20 percent as oil prices have slumped in recent years.
The announcement confirmed a Reuters story from earlier on Friday. The onshore field’s original volume in place is estimated at 1.5 billion barrels of oil equivalent.
The light oil field should begin producing by the end of 2018 or the beginning of 2019, Pemex CEO Jose Antonio Gonzalez Anaya said in a phone interview.
The area near the discovery is located where infrastructure already exists which should allow for quicker development, Pemex said in a statement following the announcement, adding that the find could double in size.
Gonzalez Anaya said the company has not decided whether it will develop the discovery by itself or with an equity partner, and he added that it is too soon to provide a production forecast or a spending plan for the field.
“We’re just now announcing the field’s discovery, and we still need to delimit it as well as establish a development plan,” said Gonzalez Anaya.
The discovery is similar in size to the field associated with the Zama well announced in July by Britain’s Premier Oil, along with partners, U.S.-based Talos Energy and Mexico’s Sierra Oil and Gas, the company said.
The energy reform championed by Pena Nieto was designed to reverse a decade-long crude production slump by attracting billions of dollars in investment via new foreign and private producers.
Mexico hit peak oil output in 2014 with about 3.4 million barrels per day (bpd).
Pemex, still responsible for nearly all of Mexico’s current crude production, expects to end 2018 with average output of 1.9 million bpd.