Mexico has long been in the world’s top 10 in terms of oil production. For years, that was buttressed from the massive flows from one huge gusher: the Cantarell field. At one point Cantarell was one of the largest oil fields in the world, by some estimates second only to Saudi Arabia’s Ghawar.
Production originally started at Cantarell in 1979. But after several decades of producing well over 1 million barrels per day, Cantarell began to decline. Mexico’s state-owned oil firm Pemex undertook nitrogen injections to keep up pressure, and that worked for a while. The company managed to boost production in the early 2000s, with output hitting a peak in 2004 at 2.1 million barrels per day.
But since then, production from Cantarell – which has been the core of Mexico’s oil production – has gone into swift decline.
A Turnaround is Here
However, the Mexican government has gone to great lengths to repair its flagging oil sector and stop the hemorrhaging. The monumental energy reform package pushed through by President Enrique Peña Nieto, while controversial, could attract the international investment needed to turn things around.
And just as the first major auctions are set to kick off, a dramatic announcement was made that couldn’t have come at a better time.
Pemex announced on June 10 that it had succeeded in discovering a major new oil field in the shallow waters off Mexico’s Gulf Coast. The field could be produced in a short time period, bringing up to 200,000 barrels per day online in less than two years. Half of that production would come from a field in the Campeche Sound, and the other half from a field in Litoral de Tabasco.
Pemex’s CEO says the collection of fields that it has stumbled upon could hold as much as 350 million barrels of oil equivalent and the discovery could be the largest in half a decade.
That could be just the beginning for a new era for Mexico’s oil sector. Let’s take a look at some of the most promising regions that international companies are poised to bid on and develop in the coming months and years.
Bay of Campeche
Maybe it shouldn’t come as a surprise, but the Bay of Campeche – home to the Cantarell, as well as three-quarters of Mexico’s overall oil production – still holds a lot of promise. That is where Pemex just made its most recent discovery, which…