Pemex reports its largest oil find in 5 years

Petroleos Mexicanos, the world’s ninth-largest oil producer, announced its biggest discovery in five years as the state-owned company seeks to reverse its decade-long decline in production.

Pemex, as Mexico’s sole oil producer is known, discovered four new fields in shallow water in the Gulf of Mexico with the potential for daily production of at least 200,000 barrels of oil and 170 million cubic feet of gas, Chief Executive Officer Emilio Lozoya said at a conference in Guadalajara. The wells, forecast to begin production within 16 months, are located close to the Cantarell field, one of the world’s largest when discovered in the 1970s.

The discoveries come after Mexico approved final legislation last year to allow foreign producers to explore and help develop oil in the country for the first time in more than seven decades.

“This is the first tangible result of the energy reform,” Lozoya told reporters following the inauguration of the Oil Workers’ Conference in Guadalajara. “Pemex, thanks to the energy reform, is accelerating plans to incorporate private capital in exploration and production of our wells.”

The discoveries were made in areas of the Gulf of Mexico that Pemex maintained last year as part of the non-competitive bid round, known as round zero. They are close to 14 shallow water blocks that private companies will bid on next month.

The discovery won’t affect Pemex’s output forecast of 2.4 million barrels a day this year though will likely alter the company’s estimate to increase production by 500,000 barrels by 2018, Lozoya said. Pemex hasn’t met its daily production target for 2015 in the first five months of the year.

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