Pemex doubles Ixachi reserve estimate to 1bn bl

Mexico's state-owned Pemex more than doubled the estimated reserves in its recently discovered onshore Ixachi field in Veracruz to 1bn bl of oil equivalent.

"This is the most important discovery in Mexico in the last 25 years," said Antonio Escalera, Pemex's director of reserves, during an event in Mexico City today.

The Ixachi field, 72km (45mi) south of Veracruz port, was discovered in November 2017. Pemex initially pegged 3P reserves at 366mn boe.

But following delimitation work carried out this year, including the termination of two new wells (Ixachi-1DEL and Ixachi-1001) at a depth of 7,500m (2,460ft), the deposit was found to be larger than expected at 50km² (19mi²) with a 1,200m hydrocarbon column.

Pemex expects the field to produce 80,000 b/d of condensates (above 40° API) and more than 720mn cf/d of natural gas once production starts in 2022.

The first well, Ixachi 1, is currently producing 2,000 b/d of condensates and 10mn cf/d of natural gas.

Development of the field, expected to cost Ps30.5bn ($1.5bn), would include the drilling of 40 new development wells. The reserves are valued at $40bn at today's prices, Pemex chief executive Carlos Trevino said during the event.

"This is a great platform from which to start the new administration, allowing Pemex to stabilize production," Trevino said.

Mexican oil production has been declining for more than a decade. The current government has said the trend will be reversed once a series of discoveries made this year start production, the Xanab light crude field returns to pre-flooding production levels and private-sector investment following the 2014 energy reform begins to flow.

Mexico's state-owned Pemex produced 1.76mn b/d crude in October, down by 3.3pc on September and down by 7.3pc from 1.9mn b/d in the same month of last year.

The October results are the lowest monthly output reported this year and the second lowest output in the past five years.

The October results were affected by cold fronts early in the month as well as maintenance at the Ku field that forms part of the prolific Ku-Maloob-Zaap complex in the Campeche sound, Juan Javier Hinojosa, Pemex E&P director told Argus.

Incoming president Andres Manuel Lopez Obrador will take office on 1 December and has pledged to increase oil production to 2.6mn b/d by the end of his administration in 2024.

"It is an achievable but opportunistic goal if it is accompanied with a good budget," said Trevino.