The Significance of Ixachi Field in Mexico's Energy Portfolio

President Andrés Manuel López Obrador assured in a recent press conference that the Ixachi field, located in the municipality of Tierra Blanca, Veracruz, will be a crucial pillar for Mexico's energy landscape for the next three decades. Ixachi’s significant reserves have solidified its status as one of the nation's key assets and the fourth largest globally in terms of gas reserves, but challenges remain for the country in terms of oil reserve replenishment. 

The discovery of the Ixachi field marked a significant milestone in the Mexican oil industry. Initially, in 2004, drilling operations reached a depth of 4,200m, with limited expectations of finding oil in significant quantities. However, the commencement of extensive exploration and production activities in 2019 led to a notable discovery: a reservoir of oil and gas much larger than anticipated, according to PEMEX.

Initially, the Ixachi Field had a declared reserve of 2Bboe, of which approximately 30% has been confirmed through tests. To date, only about 10% of this reserve has been extracted. For the present year, three key strategies have been outlined: the incorporation of more than 400MMb in reserves, the recategorization to 1P reserves of 180MMb, and an increase in daily production by more than 40Mb/d.

The introduction of this and other priority fields has been key in an environment of declining oil reserves. President López Obrador says everything that has been extracted has been replenished due to the investment in exploration that had not been carried out in past administrations. He estimates a replenishment of over 100%, with proven reserves of 6.154Bb as of 2023, according to the Hydrocarbon Information System (SIH), of which Ixachi and other fields are part, ensuring that there will be oil for the next 25 to 30 years and offsetting the decline in fields such as Cantarell, where production continues to decrease steadily.

Data from SIH shows that for the past 6 years, proven oil reserves have remained fairly stable, with a 4.8% reduction against figures from 2018 when proven reserves stood at 6.426Bb. However, 2P reserves show a 6.2% reduction going from 12.280Bb to 11.515Bb, while 3P reserves show the highest variation at -9.81%, going from 19.454Bb to 17.515Bb. 

The investment landscape has been less than favorable to reserve replenishment. At Mexico Oil and Gas Summit 2023, Óscar Roldán, Director of the Oil and Gas Division, R9 Holdings, mentioned key challenges for the industry in terms of investment, highlighting that bolstering PEMEX and addressing its debt to secure financial autonomy is a priority, while enhancing its decision-making capabilities. Resuming bid rounds is also crucial, with a focus on PEMEX’s existing reserves and production areas.
Nowadays, national oil extraction stands at approximately 1.8MMb/d. “It is possible to extract more, much more, because there are reserves. However, we decided to only extract what we need for our domestic consumption, no longer relying on selling crude oil, raw material abroad, but processing all our raw material and strengthening the domestic market. The revenues that PEMEX obtained from selling crude oil abroad are now obtained from the sale of fuels, with 75 percent of PEMEX’s income now coming from the sale of gasoline, diesel, and other oil products,” AMLO states.

This approach aligns with the current administration's pursuit of energy self-sufficiency and illustrates the rationale behind PEMEX's decision to curtail oil exports while bolstering refining capacity. PEMEX expects further export cuts in the following months not only to contribute to OPEC’s restrain on oil supply but specially to become fuel self-sufficient, something that has been postponed several times throughout the administration.