Pemex, Mexico’s state-owned oil producer, said on Tuesday that it had discovered about 180 million barrels of oil offshore.
The reserves could boost Mexico’s oil output, which has been in decline since 2004.
They were found in the Manik well, roughly 52 miles offshore in the Gulf of Mexico, and the Mulach well, about 11 miles offshore.
Pemex CEO Carlos Treviño said in a statement that the reserves are proven, probable, and possible, or 3P, meaning there’s a high degree of certainty that the oil can be extracted. The company will need between $7 billion and $10 billion in capital, including investments in oil rigs and pipelines, to develop the newly announced discovery and others found nearby in recent years, according to Reuters.
The offshore fields combined could increase Mexico’s production by up to 210 million barrels of oil and 350 million cubic feet of gas per day, Pemex said.
Mexico joined the International Energy Agency, an industry watchdog, earlier this year and was the first Latin American country to do so.
“The country’s energy sector is in a period of profound change, catalysed by comprehensive energy reforms the government has been enacting since 2013,” the IEA said of Mexico. These reforms include ending Pemex’s monopoly and attracting new players into the oil industry.
Pemex’s discovery was announced just as the IEA urged larger oil producers to open the taps on output. Fatih Birol, the agency’s head, said at a conference in London on Tuesday that US sanctions on Iran and shrinking production from Venezuela could tighten the market even further.
The cost of Brent crude oil, the international benchmark, has surged 27% this year as OPEC members and their allies cut production to boost prices following the 2014 crash. Brent surged to a four-year high of nearly $86 per barrel last week.