The OPEC oil production cut…
Oil markets are less convinced…
Mexico’s state-owned oil company, Petroleos Mexicanos or Pemex, says it’s discovered one of the most copious group of oil fields in the shallow waters of the Gulf of Mexico, its largest such discovery in five years.
The five fields, situated off the states of Campeche and Tabasco, have total proven, probable and possible reserves that may be as high as 350 million barrels of crude oil equivalent and could be producing as much as 200,000 barrels a day, Pemex CEO Emilio Lozoya told an energy conference in Guadalajara on June 10. He called the find an “achievement … of great magnitude.”
The company, based in Mexico City, said four of the fields were found off the Tabasco coast and one off Campeche. It said they could begin operating as early as autumn 2016. But Jose Antonio Escalera, Pemex’s director of exploration, said in a radio interview that it would take about three years for the fields to reach their full potential.
Related: New Silk Road Could Open Up Massive Investment Opportunities
Escalera said half of the expected output of 200,000 barrels per day would be from the four oil fields off Tabasco and the other half from the Campeche field. The Tabasco fields also are expected to produce 90 million cubic feet of gas per day, he said, and the Campeche field should yield 80 million cubic feet of gas per day.
Pemex said the recent finds were the company’s biggest since it discovered the huge Atatsil and Tsimin-Xux oil fields, also located in the southern Gulf on the western coast of the Yucatan peninsula, which were discovered in 2008 and 2010, respectively.
Related: Canadian Economy More Damaged By Oil Prices Than Expected
On July 15, Mexico plans its first auction of leases for 14 shallow-water exploration blocks in the same area of the southern Gulf, an event that is expected to open a floodgate of private investment in the country’s energy sector.
“The certain prospect of 200,000 extra barrels of production is very good news for Pemex, for the industry and for our country,” Lozoya told the meeting in Guadalajara, saying the company would experience a “clear reversal” of its current slump. But he stressed, “We are happy but not satisfied.”
The just-discovered field off Campeche is near two other deposits owned by Pemex. One is Ku Maloob Zaap, now the company’s most productive field, and the Cantarell field, discovered accidentally by a fisherman in 1976.
Related: Forget Asia. US Natural Gas To Be Exported To Mexico
Cantarell produced prodigiously until the past decade, when output began to decline, hurting Pemex’s bottom line. The company’s oil production reached a peak of 3.4 million barrels per day in 2004, but has since fallen to less than 2.4 million barrels per day today.
The new discoveries, combined with still-robust production from the Ku Maloob Zaap field, could mean a significant rise in energy production as well as a solid boost in revenue for Mexico’s federal government, which relies on income from Pemex for about one-third of its budget.
Pemex said in a statement that the new discoveries were made possible by the use of new technology, including improved sonar equipment.
By Andy Tully of Oilprice.com
More Top Reads From Oilprice.com:
Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com