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Mexico’s Oil Reserves Drop Again Despite Recent Discoveries

Gulf of Mexico Pemex

Mexico’s proven oil and gas reserves dropped again last year, after new certified discoveries—mostly by private foreign operators—were unable to keep pace with current production.

According to data by Mexico’s National Hydrocarbons Commission (CNH), the country’s proved total oil and gas reserves were 8.484 billion barrels of oil equivalent as of January 1, 2018, which was a drop of more than 7 percent compared to the January 2017 reserves update.

As of January 1, 2017, Mexico’s proved oil and gas reserves were estimated at 9.16 billion barrels of oil equivalent, down by 10.6 percent from the 10.243 billion boe as of the beginning of 2016. Proved oil reserves were down 7.9 percent to 7.037 billion barrels from 7.641 billion barrels estimated as of 2016.

At the beginning of this year, oil reserves were 6.464 billion barrels, CNH data showed.

The silver lining in the oil reserves base is that for the first time, private companies contribute to the calculation of the reserves, Mexico’s officials say. The latest reserve update includes certified reserves that Italian major Eni and Argentina’s Hokchi Energy have discovered in two shallow water blocks after Mexico started awarding contracts to private foreign operators following the end of the seven-decade state monopoly in the sector in 2013.

Related: $70 Oil Could Spark An Offshore Oil Boom

“What we see here is the first certification of reserves that are being presented by two companies that received contracts at auction,” the head of CNH, Juan Carlos Zepeda, commented for Reuters on the reserves calculations.

In addition, last summer, UK-based Premier Oil, along with its partners Talos Energy and the Mexico City-based Sierra Oil & Gas, announced a potentially huge new oil discovery off the Mexican coast, estimated to contain upwards of 1 billion barrels of oil in place.

That discovery has yet to be certified and calculated into Mexico’s oil reserves, Zepeda told Reuters.

By Tsvetana Paraskova for Oilprice.com

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