Pemex triples estimate for biggest onshore find in 25 years

MEXICO CITY (Bloomberg) -- Pemex has more than tripled its estimated reserves in its Ixachi field.

The company now believes the onshore field in Veracruz contains 1.3 Bboe in proven, probable and possible, or "3P," reserves, Petroleos Mexicanos exploration chief Jose Antonio Escalera said Tuesday at a press conference in Mexico City. Pemex expects the field to reach 80,000 bpd of condensate production and 720 MMcfd production by 2022.

“Without doubt this news will allow Pemex to contribute with more production in the future and stabilize the production platform,” CEO Carlos Trevino said. “I am confident the next administration will value this discovery a lot.” Trevino is due to step down from that role as President elect Andres Manuel Lopez Obrador takes office Saturday, having pledged to revive Mexico’s state-owned oil company.

The field is currently producing about 2,000 bpd of condensate, Escalera said. The company is expecting 5,000 bpd of condensate and 30 MMcfd by the end of 2019.

Ixachi is the most important onshore field in 25 years, Escalera said.

Pemex has struggled to increase its crude production, which is heading for a 14th consecutive year of declines. It’s target for output in 2018 is about 1.8 MMbpd, down from a previous target of 1.95 MMbpd. In 2019, it expects to pump more than 1.8 MMbpd, Trevino said.

The estimated investment to develop Ixachi field is 30 billion pesos ($1.47 billion) for 40 wells, Trevino said.

The Ixachi announcement comes a month after Pemex said it had found light crude in the shallow water Manik and Mulach oil wells in the Southeast basin in the Gulf of Mexico, an area estimated to hold 3P reserves of more than 180 MMbbl. Pemex’s Xikin-1 and Esah-1 fields are expected to begin production in 2019 and 2020, respectively.