Blighted by scandal, battered by falling production and bruised by a string of natural disasters that pushed it back into the red last quarter, Pemex, Mexico’s state oil company, still sees something to celebrate.

It claims to have made a significant oil discovery and chief executive José Antonio González Anaya says output should start rising in 2018. In addition, refining losses have been slashed by 75% and new partnerships are on the cards, easing the company’s strained finances.

Still, González Anaya is under no illusion about the challenge ahead.

“We have a lot of work still to do in Pemex,” he told the FT.

The company last week announced its biggest onshore discovery in 15 years. Although the 350 million barrels of oil equivalent (MMboe) in total estimated reserves lie nearly 8 km below ground — the well’s name means “deep” in the Aztec language Náhuatl — onshore extraction costs are a good 50 per cent cheaper than offshore.

In addition, a gas pipeline and other nearby infrastructure already exists, meaning production could start by late 2018 or 2019.

The news came a week after Pemex reported a third-quarter loss following two positive quarters, hammered by hurricanes and earthquakes that disrupted production and refinery imports. It comes as Mr González Anaya’s predecessor, Emilio Lozoya, is embroiled in a scandal for allegedly having received $10.5 million bribes from Brazilian construction firm, Odebrecht — claims he denies.

The new Ixachi-1 well in southeastern Mexico contains “the Chanel of crude”, according to Juan Javier Hinojosa, director-general of exploration and production. It is a light hydrocarbon the colour of pale cooking oil, not tar, of the type that fetches higher prices because it yields more fuel when refined.

For González Anaya, who took the helm in February last year and, for the first time in Pemex’s eight-decade history, has made profitability the key goal, the discovery is welcome news. He is seeking to transform Pemex from a bloated bureaucracy synonymous with corruption to a modern player able to compete with world majors.

“It’s a good reserve, it’s onshore, we have infrastructure, the oil is very high quality, and there’s going to be more oil,” he said. Engineers have suspected for more than 30 years that the area’s complex geology was rich in hydrocarbons, but lacked the technology to explore at such depth.

Now, González Anaya said, “if we return with new recovery technology to fields we have abandoned, we’re going to be able to extract more oil.”

Still, oil production, in freefall since 2004, is expected to hit a four-decades low of 1.944m barrels of oil per day this year. While expected to rise next year for the first time since 2004, González Anaya is still only targeting a modest 1.951 MMbbl/d for 2018.

“Pemex is still running a deficit in cash flow terms and still will in 2018. We’ve still got a long way to go?.?.?.?2018 is still going to be a tough year,” he said.

But provided oil prices do not crater, he sees a pick-up from 2019. “Unfortunately, I won’t be here,” he says.

González Anaya is widely rumored to be announced as the new finance minister as soon as this month. His departure from Pemex was always expected at the end of this government’s term. But it could come sooner if his friend, finance minister José Antonio Meade, is anointed candidate for the ruling Institutional Revolutionary Party. Meade is widely considered to be the unpopular party’s best chance of winning next July’s election while Anaya, an MIT and Harvard trained engineer and economist, is seen as one of the government’s rising stars.

The musical chairs could happen within weeks: President Enrique Peña Nieto must this month name a successor to Agustín Carstens at the Bank of Mexico — another job for which Meade’s name has been in the frame.

González Anaya brushes off questions about any potential move. For the moment he says he is focused on putting Pemex’s house in better order. But includes resolving the Odebrecht scandal, in which Pemex has also been accused of overpaying for contracts.

“We have to clear up this black cloud as early as possible,” he said.