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An international consortium led by Mexico has found a significant oil discovery in the Gulf of Mexico, which is expected to draw investments from major oil firms. 

This discovery is conservatively estimated to contain at least one billion barrels of oil reserves, however it may be contain up to two billion and it is likely to extend into the surrounding block.

This is the first discovery since the country began allowing international firms to explore two years ago, following the energy reforms brought in by President Enrique Peña Nieto in 2013 to offset the country’s declining production.

It is also the largest discovery made by private entities in almost eight decades.

Mexican company Sierra Oil and Gas, US-based Talos Energy and British-owned Premier Oil discovered the reserves in the shallow-water field, located 60km off the coast of the Dos Bocas port of Tabasco.

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By GlobalData

The firms secured the right to explore the block after they outbid a Norwegian company in July 2015 at auction.

The consortium began initial drilling at the 166m-deep Zama 1 well in May, and conclusive drilling results are expected in August.

"The consortium began initial drilling at the 166m-deep Zama 1 well in May, and conclusive drilling results are expected in August."

Sierra Oil general manager Ivan Sandrea was quoted by as saying the Mexican government will secure almost 70% of the profits from each barrel of oil from this new block.

It is estimated that this figure could reach up to approximately 80% after taxes and other fees.

Sierra holds 40% equity in the project, while Talos and Premier hold 35% and 25% respectively.

Sierra also has the backing of Blackrock Inc, Riverstone Holdings and EnCap Investments.

Initial interest shown by international firms in the new opportunities underperformed expectations, however this latest discovery and the new discoveries on existing blocks by Eni earlier this year are set to provide a new boost Mexico’s oil industry, which had seen the production drop to a 30-year low in 2016, touching an average of 2.5 million barrels per day.

The decision to open Mexico's reserves for foreign investment sparked large-scale protests in 2013, but the new discoveries suggest the reforms may ultimately prove beneficial to the country.