Mexico Tries To Save Big, Fading Oil Field (the Death of the Cantarell)

[Dogmudgeon]

A good backgrounder on a bad problem.

Apr 05, 2007 (From the Wall Street Journal via Dow Jones Newswires)

AKAL C OIL PLATFORM, Gulf of Mexico -- In March 1971, a Mexican fisherman named Rudesindo Cantarell took a few geologists from state-run oil company Petroleos Mexicanos to this spot, where he had seen oil slicks. Mr. Cantarell didn't know it, but he had stumbled across one of the largest offshore oil fields ever found.

A few decades and 12 billion barrels of oil later, the field that bears Mr. Cantarell's name is dying, and Pemex, as the state-owned company is known, is struggling to stave off the field's demise. From January 2006 though February 2007, Cantarell lost a staggering one-fifth of its production, with daily output falling to 1.6 million barrels from two million.

The oil industry was stunned. Cantarell, which currently produces one of every 50 barrels of oil on the world market, is fading so fast analysts believe Mexico may become an oil importer in eight years. That would batter Mexico's economy, which depends on oil exports to fund 40% of its government spending.

The continued deterioration of the world's second-biggest field by output would also put pressure on prices on the global oil market, where supplies are barely keeping up with growing demand as it is. And it would leave the U.S. even more dependent on Middle Eastern supplies -- and that much more vulnerable to political tumult in that region.

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Link to the article at Rigzone (NO registration required)

Link to the discussion at The Oil Drum

--p!