One of Mexico’s earliest private-sector energy investors says that it has struck it big with a significant oil discovery in Mexican waters.
Britain’s Premier Oil PLC, along with partners Talos Energy of Houston and Sierra Oil & Gas of Mexico City, said Wednesday that exploratory drilling in the Zama-1 field, located in the shallow waters of the Gulf of Mexico, had uncovered a “world-class” formation with between 1.4 billion and two billion barrels of light crude oil, or roughly double earlier predictions.
Earlier this year, the group had estimated that there were between 700 million and 800 million barrels in the deposit.
Also Wednesday, the government awarded exploration and production licenses for seven of 10 blocks containing mostly natural gas, nine of them in the Burgos basin of northeastern Mexico. Expectations were modest for the gas auction, given the low price of the fuel and readily available imports from the U.S.
The discovery, along with strong interest from foreign investors in recent oil and gas auctions, is a boon for the Mexican government, which in 2014 opened up the country’s energy industry to private investment after 76 years of state ownership.
The Zama-1 discovery “proves that the energy reform was a step in the right direction,” said Mexican Energy Minister Pedro Joaquín Coldwell. “The Mexican state is going to increase its hydrocarbon reserves, which had been declining, and…benefit from the corresponding tax revenue.”
The energy overhaul has become a political football in Mexico in the run-up to next July’s presidential election. Thousands of Mexicans have staged protests against a sharp increase in gasoline prices that began this year as part of the energy reform.
https://www.wsj.com/articles/investors-find-major-oil-deposit-in-gulf-of-mexico-1499872771
Meanwhile, Andrés Manuel López Obrador, Mexico’s leading opposition leader, has pledged to roll back or reverse the reforms and build new refineries across Mexico to create more energy-sector jobs.
“To people who know the industry, it’s very good news that there is more oil than we expected,” said Jorge Piñon, a former oil executive who is now a professor at the University of Texas, Austin. “But from the point of view of the guy on the street, as far as he’s concerned, the reform hasn’t given him any benefits so far.”
Premier, Talos and Sierra won a tender to develop Zama-1 in a 2015 auction, the first such contracts awarded to private investors.
The find is “the most important achievement so far of Mexico’s energy reform,” said Pablo Medina, an analyst with Wood Mackenzie who focuses on Latin America.
The firm estimates that Zama-1 is one of the 20 largest shallow-water fields discovered globally over the past two decades.
Others cautioned that Premier’s estimate of the size of the discovery refers only to oil-in-place, not the amount of hydrocarbons that could be recovered from the field. Energy-focused investment bank Tudor, Pickering, Holt & Co. estimated that Zama-1 could yield about 425 million barrels.
Alfredo Marti, managing director of Riverstone Holdings, the U.S. private-equity firm that backs both Sierra and Talos, said that drillers typically recover 25% to 30% of the oil found in formations like Zama-1, but said he expects the group could recover between 30% and 40% because the area where the oil is located is deeper than expected and the rock more permeable than initially thought.
“Not only is there more oil there, but it’s easier to recover,” Mr. Martí said. “It shows how there’s low-hanging fruit to be had in Mexico. In the U.S., companies work extraordinarily hard chasing a deposit of even 20 million barrels…With the prices of oil and gas being so low, we don’t have as many opportunities to break out the champagne these days, but this is one of them.”
The discovery comes on the heels of another significant oil find in the Gulf of Mexico. Italy’s Eni SpA on Wednesday estimated reserves in a field it won in 2015 at around one billion barrels of oil equivalent. Initial estimates had put reserves in that field at about 800 million barrels.
Wednesday’s auctions also showed that Mexico has a large and growing market for natural gas. It imported around 4.6 billion cubic feet a day of natural gas in the first four months of this year, accounting for nearly 60% of its needs.
Canada’s Sun God Resources and Mexico’s Jaguar Exploración y Producción de Hidrocarburos won six of the blocks. There were only six bidders for the gas auction, while 17 bidders were participating in a later auction Wednesday of 14 onshore oil and gas blocks.
"Oh Boy Here I go Again"
Oil is fucking stupid and everyone knows it. A bunch of people should blockade the oil.
t. drunk liberal
>>156966
That will hurt Mexico and Mexicans you are taking food out of their mouths.
>>156967
Yeah, but it's better to not accept a significant increase in an already serious risk of long-term existential threat to Earth's ecosystems and human civilization.
They'll take a bit of a hit, mitigated by development aid I don't mind giving. If we can spend a trillion+ on wars to try and give people democracy, we can stop that and spend 3B to actually save humanity's future.
>>156966
Dunno about Republicans in general but Trump supporters should be on board with us that this is a great reason to transition to renewable energy resources all the quicker. Trump ran on a campaign of autarky, so if other countries have plentiful oil reserves, what better way to limit their influence on us but to end our dependence on cheap oil?
It doesn't require much indigenous technological prowess to benefit from oil reserves. In comparison, manufacturing photovoltaic panels (mostly involves packing sand, not cheap labor intensive) and nuclear reactors is a greater challenge for developing countries.
That's why as a knowledge-economy, our comparative advantage should be in high technology. Let's focus on developing renewable energy technology so we don't have any impetus to purchase cheap fuel from the developing world.
>>156929
Welp war with Mexico I guess
>>156971
You're a wise man.
We also could use electric cars that an enthusiast would love, so that the technology could be more marketable. Imagine how /o/ would love a Miata or an 86 with an assload of power that they can plug into their mom's power outlet; or better yet a solar panel that sits on the roof and hood of their car.
>>156969
Fuck that. I am totally on board with transitioning to renewables, but we should not be giving aid to countries for doing jack shit. If you want to truly help the third world, set up some kind of rewards system where they receive funds for accomplishing tasks.
Decrease crime rate by x%
Improve quality of life x points
Increase education by x%
Etc.
Combine that with trade deals that incentivize the countries to develop their own industry and we should see great improvements in quality of life at much faster rates then simply handing free food and money to the local warlords.
>>156996
I would love if companies could provide an option to add an electric/hybrid engine onto any of their models. Unfortunately we would need to update our energy grid before we can support everyone suddenly buying an electric car.
>>156969
CHINA is producing more CO2 than all of Europe and North America combined.
You really want to cut back carbon emissions drop a couple of nukes on them.
It's fucking time we put a stop to the tyrannical Mexican government and the drug cartels enslaving the people of Mexico. USA! USA! USA!
>>157049
Most of these cartels hold more influence than just mexico. You're a fool to think it's a problem you can do anything about.
>>157055
Nothing that a good dose of American democracy can't cure. Just look at Iran and Afganistan.
>>157049
sorry but those drug cartels pay us too much money to give a shit
>>157043
B-but my iPhones!