[bratticus]

$this->bbcode_second_pass_quote('Revi', 'P')obre Mexico, tan lejos de dios, y tan cerca a los estados unidos.

[bratticus]

[url=http://www.ri.pemex.com/index.cfm?action=content&sectionID=21&catID=12177]
(click for source)[/url]

[eastbay]

Bloomberg reports that Cantarell is continuing its crash and Mexico's oil production is now down to 2.7 mb/d as of November.

That means 'only' 550,000 more bb/d in decline and they join Import Land nations.

[eastbay]

And this Reuters report from a half hour ago addresses more detail regarding Mexico's accelerating production decline.

[Tanada]

$this->bbcode_second_pass_quote('eastbay', '[')url=http://www.bloomberg.com/apps/news?pid=20601086&sid=aGo_WJi7Penk&refer=latin_america]Bloomberg reports[/url] that Cantarell is continuing its crash and Mexico's oil production is now down to 2.7 mb/d as of November.

That means 'only' 550,000 more bb/d in decline and they join Import Land nations.

[eastbay]

$this->bbcode_second_pass_quote('Tanada', '')$this->bbcode_second_pass_quote('eastbay', '[')url=http://www.bloomberg.com/apps/news?pid=20601086&sid=aGo_WJi7Penk&refer=latin_america]Bloomberg reports[/url] that Cantarell is continuing its crash and Mexico's oil production is now down to 2.7 mb/d as of November.

That means 'only' 550,000 more bb/d in decline and they join Import Land nations.

[deMolay]

At what production level does Mexico hit the wall, and become an importer, or I should say at what point do they stop exporting oil? Is it possible to know this? Is it on a report somewhere? And what will this do to the USA's situation? The MSM doesn't seem interested. I think this will be very bad for the US economy, how will they replace this much oil?

[ROCKMAN]

deM,

As I understand the field's production dynamics, the injected N2 gas cap is reaching the producing perforations. For quit a few years some expats who have worked in the field have offered that the high withdrawal rates were prematurely coning the N2 down and depleting the pressure drive. Even if this weren't the case it would be difficult to project future decline rates without a reliable map showing the remaining producing perfs in relationship to the current N2/oil level. It's easy to imagine that the sudden decrease in rate is due to the lowered N2/oil contact reaching the perfs in more wells. But subject to the relative position of the remaining wells the rate of decrease might slow (if most of the remaining perfs are much lower) or increase even quicker (if most of the remaining perfs are just below the current N2/oil level). I’m sure PEMEX has a good handle on that status: it’s a very basic reservoir engineering model. But just like the KSA they don’t appear to have much interest in sharing.

If it's the latter case the field rate could drop as fast or faster then we've seen the last few months. Or not. The future rate decline can't be projected without the details of the structural relationship of the remaining wells to the current N2/oil level. Just a rank guess on my part but I suspect it will remain as bad as we've seen or even get worse based upon typical deline rates in similar fields.

[deMolay]

What is your opinion of the effects on the USA if the Mexican oil is no longer available. You lost me with all the Oil production tech talk, sorry.

[ROCKMAN]

Sorry deM...I get carried away sometimes.

The significant aspect of losing this production is that it's a prime source of sweet crude for Gulf Coast refineries. There will be other sources but they'll be more costly to refine. Revamping a refinery to run the heavier crudes is expensive and require faith that you'll have adequate supplies in the future to get the pay back.

The same change is going on in most other producing regions including the Middle East: the sweet cude is developed first with the heavier crudes exploited later in the cycle.

[deMolay]

So no long lasting effect on the US economy, or worldwide oil supplies? In other words no short term shortages of crude for USA. Thanks.

[eastbay]

$this->bbcode_second_pass_quote('deMolay', 'A')t what production level does Mexico hit the wall, and become an importer, or I should say at what point do they stop exporting oil? Is it possible to know this? Is it on a report somewhere? And what will this do to the USA's situation? The MSM doesn't seem interested. I think this will be very bad for the US economy, how will they replace this much oil?

[deMolay]

Thanks Eastbay.

[SteinarN]

It's a bit old, but here is the link to the november report.

The december report is due on january 21.

[wisconsin_cur]

I do believe that they have contracts to sell @ 70 a barrel through the end of 2009. I do not know if they have contracts to buy refined product at a particular price or not. But if they are buying spot and selling on the contract and if spot prices stay low this year they should be able to limp through the next 12 months.

Those contracts are kind of like the resetting of interest rates on ARM loans. Everything can look better than they are until the month that they reset.

[Maddog78]

No problem says Mexico, production will increase


$this->bbcode_second_pass_quote('', 'T')he Mexican government said a recent downward trend in oil production will conclude between this year and next and that output in 2015 will total some 3 million barrels per day, not far off the country's all-time highs.

In an appearance before the Senate on Wednesday, Energy Minister Georgina Kessel said that, following recent energy sector reforms, state oil monopoly Petroleos Mexicanos will produce between 2.7-2.8 million bpd in the 2009-2010 period, or similar to the current output.

[newman1979]

Pemex has a history of over estimating production for over four years. Domestic pressures require a belief in future oil revenues to fund the Country. Customers are also a concern if they feel uncertain of Pemex's ability to fulfill contracts. At present pricing, Pemex probably can't be a golden goose for the state, borrow more, or spend much for new oil at the same time. Therefore a public statement of comfort was issued, in light of the crash of Cantarell IMO.

[newman1979]

[i]Pemex Oil Output Declines at Fastest Rate Since World War II
Email | Print | A A A

By Andres R. Martinez

Jan. 20 (Bloomberg) --[/quote] Petroleos Mexicanos, Mexico’s state oil company, will probably report its fastest drop in production since 1942, eroding revenue as plunging crude prices limit the amount of cash available to drill for new reserves.

Pemex last year likely extracted 2.8 million barrels a day, down about 9 percent from the 3.08 million a day pumped in 2007, representing a total of $20 billion in lost sales, according to data compiled by the government and Bloomberg. The Mexico City- based company, which had revenue of $104 billion in 2007, plans to report annual production figures tomorrow.

Falling output is leading Pemex into deepwater exploration as state-run peers Petroleo Brasileiro SA in Rio de Janeiro and Ecopetrol SA in Bogota invest billions to boost production. Costs are rising at Cantarell, Pemex’s largest field, after declining pressure reduced output in the past five years. Oil tumbled 77 percent from its July record to $34.08 a barrel in New York.

Pemex’s “biggest problems have yet to come,” said Alejandro Schtulmann, head of research at Empra, a political- risk consulting firm in Mexico City, in an interview. “The fall in oil prices and lower production is going to make expensive exploration projects less attractive now.”

Mexico relies on Pemex for 40 percent of its budget. Falling sales may cut into funding for a 570 billion-peso ($41 billion)-a-year infrastructure plan President Felipe Calderon is counting on to keep the country out of recession this year, Schtulmann said.

Sliding Output

Sliding Pemex output risks cutting supply to the U.S., which gets more oil from Mexico than all countries except Canada and Saudi Arabia. Lower production also comes as Venezuelan President Hugo Chavez, who has threatened to end oil shipments to the U.S. and opposes U.S. influence in Latin America, holds a referendum that would end term limits on his presidency.

Crude touched a record $147.27 a barrel on July 11.

To offset declines at aging fields, Pemex is focusing on tapping oil under seas deeper than 500 meters (1,640 feet), where the government estimates it has 30 billion barrels of crude oil equivalent. That would be enough to supply the U.S. for four years, according to BP Plc.

Deepwater discoveries or finds at the onshore Chicontepec field may help counter a decline at the Cantarell field, the world’s third largest. Pemex is betting it can produce about 500,000 barrels a day from Chicontepec, a series of small, connected deposits spread across Veracruz and Puebla states, by 2021. The first deepwater well is due to come on line by 2015.

Cantarell Declines

By then, Cantarell may be producing less than 500,000 barrels a day of oil, Chief Executive Officer Jesus Reyes Heroles said last year. Output at the field, falling more than twice as fast as government estimates, dropped to 862,060 barrels a day in November from a year earlier, according to Mexican energy ministry data.

Cantarell, struck in 1976, was the biggest oil find in the Americas until last year, when Petroleo Brasileiro, known as Petrobras, discovered the Tupi field. Pemex estimates that Cantarell had 17 billion barrels of crude oil equivalent in reserves when it was found, compared with Tupi’s 8 billion barrels. Cantarell represents about one-third of Pemex’s output today, down from 65 percent at its peak in December 2003. [quote] [/i]

Could someone confirm what company suffered a $15 billion loss in 2009 by contracting to take all of Mexico's oil exports for a year at $70 a barrel? If they truly hedged their entire output, Mexico could fill the entire amount by buying spot oil and current futures to fulfill the order and not pump a single export barrel. This claim of hedging 500 million barrels needs confirmation IMO

[TheDude]

$this->bbcode_second_pass_quote('newman1979', 'C')ould someone confirm what company suffered a $15 billion loss in 2009 by contracting to take all of Mexico's oil exports for a year at $70 a barrel? If they truly hedged their entire output, Mexico could fill the entire amount by buying spot oil and current futures to fulfill the order and not pump a single export barrel. This claim of hedging 500 million barrels needs confirmation IMO

[bratticus]

Have another copy of that automatically-updated chart: