PREMIER Oil, which has a big North Sea business, has announced it has made what looks like a billion barrel oil find off Mexico sending its shares surging 35 per cent.

The Zama discovery is reckoned to be one of the biggest made anywhere in the world in recent years and is a landmark success for London-based Premier.

The find is the first made by a private sector player off Mexico after the country decided to allow international players to start exploring in the hope of boosting its production.

While Mexico is rich in oil and gas there has been relatively limited exploration work off the country, where the state-owned Pemex long held a monopoly on activity.

Premier and partner firms from the US and Mexico made the find in a shallow water area where there had been no drilling.

Chief executive Tony Durrant said: “It is particularly pleasing that our strategy of focusing our exploration portfolio on high impact opportunities in proven but under-drilled basins has led to this world class discovery with our first well in Mexico.”

He said the discovery was an extremely important event for Premier, its partners and for Mexico.

The announcement will stoke renewed interest in Mexico, which has completed two licensing rounds since the market was opened up in 2015.

It will be studied carefully by Edinburgh-based Cairn Energy. The company was awarded interests in two shallow water blocks off Mexico in the second licensing round last month. One is adjacent to the acreage containing Zama.

Cairn acquired the acreage under a strategy which combines potentially transformational exploration in areas where there has been limited activity with lower risk development work in the North Sea.

The company last month increased its exposure to Ireland under this policy.

Ireland was also in focus yesterday when Royal Dutch Shell announced the sale of its stake in the giant Corrib gas field to Canadian investors, in a deal worth up to $1.23bn (£0.95bn).

Shell will book a $350 million impairment charge following the sale. This is being completed under the company’s plan to raise $30bn from disposals over three years.

In January Shell agreed to sell a portfolio of mature assets which account for around half its UK production to Chrysaor for up to $3.8 billion.

Shell brought Corrib onstream last year. The project was delayed by 11 years after its plans to build onshore facilities for the field faced deep opposition locally and from environmentalists.

Five local men, who opposed a pipeline to an onshore refinery, were jailed for 94 days in 2005 for defying a court order not to protest over the Shell project.

Shell is selling the Irish business that holds the Corrib stake to the Canada Pension Plan for an initial $947m. It will get additional payments of up to $285m between 2018-2025, subject to gas price and production.

Premier is developing the Catcher find in the North Sea with Cairn.

It started production from the Solan field West of Shetland in April last year, around 18 months later than originally hoped.

Premier has highlighted the impact of low productivity and bad weather on the development programme for the field.

Shares in Premier Oil closed up 16.25p at 62.5p.

The company made the Zama find with Houston-based Talos Energy and Mexico's Sierra Oil & Gas on a licence that was awarded in the first Mexican round, which was completed in 2015.

Tim Duncan, president and chief executive of Talos, described the Zama find as historic.

He added: "We believe this discovery represents exactly what the energy reforms intended to deliver: new capital, new participants and a spirit of ingenuity that leads to local jobs and government revenues for Mexico.”

Talos noted the closest well to the Zama prospect was a dry hole, approximately 12 miles distant.

Premier has 25 per cent of Zama while Talos has 35 per cent. Mexico’s Sierra Oil & gas has 40 per cent.