Mexican President Enrique Pena Nieto declares 1.5 billion barrel oil and gas discovery

Mexican President Enrique Pena Nieto said Friday state oil company Pemex has made a “major” oil and gas discovery with an estimated 1.5 billion barrels of crude equivalent, its largest onshore find in 15 years.

The new field, dubbed Ixachi-1, is located in the eastern state of Veracruz near existing Pemex infrastructure, meaning it can be tapped “relatively soon, and at low costs,” said Pena Nieto.

The estimated volume makes it “the largest onshore find the company has made in the past 15 years,” he said to applause from invitees at an event in the central state of Hidalgo.

The field’s proven, probable and possible reserves -- an estimation of the amount of oil and gas that can be brought to market near-term -- are 350 million barrels, the president said.

Pemex said the size of the find may prove to be larger, and even double.

Industry experts urged caution, however.

Security guards stand guard at a Pemex distribution center which is blockaded by truckers protesting the rise in fuel prices in Guadalajara, Jalisco state on January 4, 2017. (Photo by AFP)

“It’s very early to talk about reserves... More work needs to be done to see how big it is,” said Gonzalo Monroy of Mexico City energy consultancy GMEC.

But he said any new find is good news for Pemex, Mexico’s largest company, which has struggled with declining production in recent years.

“Pemex has discovered there is still considerable exploration potential” in Mexico, he told AFP. “That’s good news for private industry and for the country.”

Mexico enacted a landmark energy reform in 2014 that reopened the oil and gas sector to foreign investors after 76 years of state monopoly, seeking to breathe new life into it.

As a result, Pemex now faces private competition. It reported a loss of $5.3 billion in the third quarter, as production fell by 12 percent from the same period last year, to 1.9 million barrels per day.