VERACRUZ, Mexico - President Vicente Fox climbed aboard a drilling platform in the Gulf of Mexico on Tuesday to formally announce a new deep-water oil discovery he said could eventually yield 10 billion barrels of crude oil. ADVERTISEMENT An exploratory well dubbed Noxal 1 was drilled at a depth of 3,070 feet below the water, and is seeking a depth of 13,125 feet.
"With Noxal we will begin a new era of oil exploration in our country," Fox said aboard the "Ocean Worker 6 Britania" platform.
Government estimates say the find could exceed reserves at the giant offshore field Cantarell, Mexico's largest oil field, which has seen its production decline but is still expected to yield 1.9 million barrels a day this year.
Luis Ramirez, chief executive of Mexico's government-run oil monopoly Petroleos Mexicanos, or Pemex, said Noxal is the fourth deep-water well explored by Pemex.
Ramirez said that while production tests will be conducted in coming weeks, "evidence found is sufficient to infer potential reserves to be discovered that could reach 10 billion barrels of crude oil equivalent."
"This number, compared with annual production of 1.6 billion barrels of crude, shows its strategic importance," Ramirez said, adding that crude oil production at Noxal likely won't begin for eight to 10 years.
Fox said his administration has invested more than $6.3 billion in exploration in the last five years. Pemex expects the new find to offset further production declines at Cantarell expected in coming years.
Pemex contracted a private company to drill the well. The fastest way to get the oil out would be by Pemex forming alliances with companies that have the deep-water technology. However, current laws forbid private companies from exploration and production activities in Mexico except under contract to Pemex.
The Fox administration has been attempting to ease foreign investment restrictions in the state-run energy sector. But those efforts have been blocked in Congress.
Pemex produced 3.33 million barrels a day of crude oil last year, of which it exported 1.82 million barrels. This year, the company expects to raise production to about 3.42 million barrels a day.
