After three years of 3-D seismic mapping, Mexico’s Petroleos Mexicanos (Pemex) engineers claim to have discovered several oil and natural gas deposits in the deep waters of the Gulf of Mexico that could double the country’s total reserves and boost output to rival other world-class producers.
A Pemex spokesman said the deposits, mapped in seven new offshore blocks, are estimated at 54 billion boe. The deposits are located at a depth of about 3,000 meters — deepwater where the company will need investments and technology-share agreements to access. If proven accurate, the new reserves would nearly double Mexico’s numbers to 102 billion boe.
“This is what exploration and prospecting studies have found,” said Sergio Uzeta, Pemex communication director. But he noted that it was “important to be clear” that there is only a “probability of finding large quantities of oil and gas. The existence of this oil wealth is very probable, but we have to confirm it so that it will be a proven matter.”
Luis Ramirez, Pemex’s chief of exploration and production, told El Universal that Pemex used 3-D seismic studies that took three years and cost $4.5 billion. More studies to confirm the reserves will require advanced technology, he said.
If proven, “this will put us on a par with reserves levels of the big players like Iraq, United Arab Emirates, Kuwait or Iran,” Ramirez told the Mexican newspaper. “What’s more, we would be in a position to reach production levels like those of Saudi Arabia, which produces 7.5 million bbl/d, or Russia, which produces 7.4 million.”
Mexico’s reserves are currently estimated at 48 billion boe. Proven reserves total 18.9 billion boe, and proven plus probable totals 34.9 billion boe. In July, Mexico’s crude oil production averaged 3.363 million bbl/d, while exports averaged 1.8 million. Although Pemex already is a large exporter, it gives the government 61% of its revenue, and does not have the money to afford advanced technology. Deepwater oil and gas extraction costs about $4/bbl, which is about double the cost from developing shallow water reserves.
Several U.S. experts questioned the size of the possible reserves, as well as the timing of the announcement.
Richard Nehring, president of Colorado Springs-based NRG Associates, studies North American oil and gas fields. He told the Washington Post that based on U.S. Gulf of Mexico discoveries, Mexico’s could be “very significant.” However, he thinks the size may be exaggerated. “The amounts are too large,” he was quoted as saying. “They may have exaggerated it for political purposes.”
On Wednesday, President Vicente Fox is scheduled to give a state-of-the country address. The Post quoted a source who said Fox was expected to announce the discovery when he gives his speech.
“We’ve been through this before,” Carlos Heredia, a Mexican political analyst and economist, told the Post. He recalled a similar announcement by Mexican President Jose Lopez Portillo in the late ’70s. Lopez Portillo announced a major oil find in Mexican territory and told Mexicans to get ready to “administer the abundance.” His promised oil boom never materialized, said Heredia, and his presidency is now remembered best for economic mismanagement and paralysis.
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