Pemex Oil Production Falls 11% in June on Aging Field

Petroleos Mexicanos, the state-owned energy company, said oil output fell 11 percent in June from a year earlier as new wells failed to keep pace with a four-year decline in the aging Cantarell field, the nation’s largest.

Production dropped to 2.839 million barrels a day in June from 3.206 million a year earlier, the Mexico City-based company, known as Pemex, said today on its Web site.
At Cantarell, where a drop in pressure is making it more difficult and costly to extract oil, the company pumped 1.017 million barrels a day, down 35 percent from a year earlier and the fastest rate of decline in 12 years, Pemex said. The company is pumping 33 percent more from the Ku-Maloob-Zaap field to make up for the decline at Cantarell.

A four-year drop in production and reserves put pressure on Pemex to spend more on exploration at a time when oil prices are the highest ever. The company estimates the drop in output costs about $20 billion in lost revenue annually, and President Felipe Calderon has proposed reforms that seek to give Pemex more freedom to manage the state’s resources and choose projects.

Bloomberg