PEMEX - Cantarell Production Declines By 24% In 12 Months - NineMSN

[hatrack]

Mexican President Felipe Calderón issued a desperate plea to Congress at the weekend to approve his energy reform proposals after figures showed that oil production had slumped to a nine-year low.

The rapidly declining production in one of the world's top 10 oil-producing nations comes amid a global supply crunch that has sent the price of international crude to records in recent weeks. On Friday, Pemex, Mexico's state oil monopoly, reported that April average daily production had fallen to 2.77m a day compared with 2.85m the previous month and 3.18m barrels in April 2007.

According to Pemex, production at Cantarell – one of the world's largest oil complexes, which accounts for roughly half of Mexico's total daily output – has shrunk 24 per cent in the past 12 months alone.

The latest data highlight the increasing difficulties faced by Pemex, which has long suffered from insufficient funds for exploration, ageing existing fields, and Mexico's constitution, which prohibits it from entering joint-risk contracts with third parties. "The rate of decline is much quicker than we had anticipated," Jordy Herrera, under-secretary for energy, told the FT this month.

Ed. - emphasis added.

EDIT

http://money.ninemsn.com.au/article.aspx?id=569660

[phantom power]

1. A quarter of their production. Wow.

[IndyOp]

2. Hatrack - Is there any reason to believe that this isn't simply market manipulation?

Turn down the pump speed and yell louder about peak oil and raise the prices...

If it winds up increasing oil prices and forcing people to move to renewable energy sources then fine.

I think Greg Palast is on the right track with his reporting that the reason we've been determined to control Iraq is to SLOW oil flow so that prices can be jacked up.

:(

[phantom power]

3. This is bankrupting the Mexican govt.

[Finishline42]

4. Oil provides 40% of the income for the Mexican govt.

Their output has been in double digit decline for the last 2-3 years.

It's a result of living high off the hog and bleeding the pig dry.

They need to invest more in finding additional fields.

[pscot]

5. Why would they run the risk

of throwing Mexican society into complete chaos and destabilizing the regime, so they could jack up the price of oil later?

[hatrack]

7. As PP answered earlier, it's because they'd be committing political suicide for short-term gains

No matter the venality and lassitude of the Mexican ruling elite (probably comparable in degree to that of our own, though confined to far fewer families), I don't think they'd be willing let the whole thing collapse. There's too much at stake for them personally, and even their private security forces wouldn't be enough to take on ensuing social chaos with a reasonably high expectation of survival and wealth preservation.

Also, the geology and recovery history of Cantarell lends itself perfectly to this kind of rapid decline - extremely heavy gas injection and other EOR, lots and lots of horizontal drilling - all of which points to the kind of production history you see at Samotlor, which was essentially crank the production and let all - all other considerations go by the boards.

[phantom power]

8. How I learned to stop worrying and love fractional flow curves.

x(

[hogwyld]

6. Off to the greatest for you!

The rest of the world needs to understand the massive migration that is to follow the collapse of the Mexican government and economy that is coming soon.