October 9, 2018 / 5:37 PM / 9 days ago

Pemex finds oil in Gulf of Mexico to boost lagging output

MEXICO CITY (Reuters) - Mexico’s state-run Pemex [PEMX.UL] said on Tuesday it has discovered up to 180 million barrels of crude oil in the Gulf of Mexico’s shallow waters, a find that is expected to help boost the country’s dwindling oil production.

Carlos Alberto Trevino Medina, Chief Executive Officer of Petroleos Mexicanos (Pemex), speaks during a news conference in Mexico City, Mexico October 9, 2018. REUTERS/ Henry Romero

Pemex, whose oil and gas output has been declining since 2004, said light and heavy crudes were found in seven reservoirs along the Mulach and Manik fields in the southern Gulf of Mexico, close to existing infrastructure for production and transportation.

“These are the reservoirs that will feed the country’s reserves,” said Mexican Energy Minister Pedro Joaquin Coldwell at a news conference with Pemex executives.

Carlos Alberto Trevino Medina, Chief Executive Officer of Petroleos Mexicanos (Pemex), looks on during a news conference in Mexico City, Mexico October 9, 2018. REUTERS/ Henry Romero

The discovery of proven, possible and probable reserves (3P) in Mulach and Manik follows discoveries announced by Pemex in recent years in four nearby fields. Together they will require $7 billion to $10 billion in investment, including drilling rigs, pipelines and at least one production platform.

Even amid budgetary constraints, Pemex in recent years has increased exploration efforts, with a 25 percent success rate in confirming reserves, below rates registered in previous decades, according to the firm’s exploration chief Jose Antonio Escalera.

Rising crude prices and an expanding budget now allow the company to do more to reverse the country’s falling proven reserves, which last year declined 7 percent to 8.48 billion barrels of oil equivalent.

Pemex expects new production from the Xikin, Esah, Kinbe, Koban, Mulach and Manik offshore fields to add up to 210,000 barrels per day (bpd) of crude and 350 million cubic feet per day (mmcfd) of natural gas by the second half of 2020.

Carlos Alberto Trevino Medina, Chief Executive Officer of Petroleos Mexicanos (Pemex), holds a news conference in Mexico City, Mexico October 9, 2018. REUTERS/Henry Romero

The first field to add barrels would be Xikin, discovered three years ago, where early production is expected in 2019. The Esah field would follow in the first quarter of 2020.

Mexico expects the downward trend in its oil reserves to turn positive in two years, following a constitutional energy overhaul enacted in 2013, said Joaquin Coldwell.

The new fields will also contribute relatively quickly to Pemex output in shallow waters, where the vast majority of its production originates. Pemex has recently been facing production problems at one of its main shallow-water areas, the Xanab light crude field.

“We still don’t have a specific production goal for this year. There’s an emergency plan to ease Xanab’s (output) declination,” Pemex’s CEO, Carlos Trevino Medina, said at the news conference.

Reporting by Ana Isabel Martinez and Marianna Parraga in Mexico City; Writing by Anthony Esposito; Editing by Dan Grebler and Matthew Lewis

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