Pemex’s woes may clear way for Brazil to help

The Pemex crisis that critics have warned about for the past decade has arrived: Production at the company’s largest oil field, Cantarell, fell 18 percent last year, and Pemex has little petroleum lined up to replace it. Yet the government of President Felipe Calderon finds itself unable to act to prevent what could be a disaster for both Pemex and the government, whose budget relies heavily on Pemex sales.

The price of oil, which jumped 57 percent last year, has kept revenue at the oil giant from falling, masking a production decline, massive inefficiency and overstaffing.
In a report released Sunday, Pemex and the Mexican Energy Ministry said the oil company must work with outside firms to boost sagging production and gain access to better equipment.

The Mexican Energy Ministry estimates 30 billion barrels of oil and gas lie below the deep water on the Mexican side of the Gulf of Mexico.

Yet it’s unclear whether Pemex has the technology, money or competence to drill successfully in waters as deep as 10,000 feet.

Calderon wants Pemex to have more autonomy from the government and the right to form partnerships with other companies to gain access to deep-water drilling technology.

Petrobras is eager to help. Before Brazil opened its oil industry to competition, Petrobras was inefficient and had little incentive to grow, says Samir Awad, manager of Petrobras’ operations in the Americas, Africa and Eurasia.

Houston Chronicle