Petroleos Mexicanos (PEMEX), the fourth-largest oil producer in the world, has announced that it has discovered a crude oil deposit that could provide as much as 1 billion barrels by the time exploration and extraction is complete.
More than 500 million barrels are estimated to lie beneath the original well site, dubbed Navegante 1, at a depth of nearly 4 miles, with another 500 million barrels expected to lie in surrounding areas. PEMEX, a state-run oil firm, has already spent more than $10 billion in exploration efforts, culminating in this, the largest solid-ground crude discovery made in the country in the past 10 years. (Read More: How Much Oil is Left in the World?)
That same $10 billion has also gone towards offshore exploration, leading to two other major reserve discoveries in the Gulf of Mexico over the past few months; combined, these three new reserves promise to add nearly 30 billion barrels to world reserves. The offshore discoveries, made via PEMEX ultra-deep wells Trion-1 and Supremus-1, ended a drought for the firm that saw them come up short in the drilling of their last 22 wells, and the company’s perseverance was praised by Mexican president Felipe Calderon.
“PEMEX has steered itself toward investments in exploration, and it’s showing results,” said Calderon in an official statement.
In addition to these latest reserve discoveries, PEMEX has also found success in the shale gas niche, locating prime wells in the Mexican-owned area of the Eagle Ford region; the company will begin offering contracts to develop that resource in early 2013. (Read More: Setting the Record Straight on U.S. Oil Reserves)
Combined, these new fossil fuel sources will require heavy investment to bring them to production, with government officials estimating costs of $35 billion per year to develop all sites simultaneously. With a previous government-approved budget of only $22.7 billion, PEMEX will need to petition Mexico’s federal government for the additional funds, potentially bringing about a major economic change for the country.