Mexico Replaces 34% of Oil, Gas Reserves in 1H 2008

MEXICO CITY(Dow Jones Newswires), November 19, 2008

Mexico booked enough new oil and natural gas reserves to replace 34% of production during the first half of this year, but the country will register some large finds before the end of the year, said the Energy Ministry in a document published on its Web site.

The ministry said the recently discovered Ayatsil oil field in the Campeche Sound will help boost proven oil reserves.

Decades of under-investment in exploration left Mexico with only 14.7 billion barrels in proven oil and natural gas reserves, enough crude oil for nine years of production at last year's rates. Mexico has increased exploration spending and expects to be finding enough oil to completely replace yearly production by 2012.

In 2007, the replacement rate at state oil monopoly Petroleos Mexicanos was 50.3%," and we expect it to close 2008 at 61%," said the ministry in the document.

Pemex expects Ayatsil to produce 150,000 barrels a day of crude oil by 2012. The ministry said the field contains up to 553 million barrels of potential reserves.

Copyright (c) 2008 Dow Jones & Company, Inc.