[misterno]

Mexico will see riots and too much blood will be shed on the streets. Oil is the biggest life line of the country, if that is gone what is left?

First the currency will collapse due to import/export numbers and then budget deficit then their rating will be downgraded. Prices of all basic necessities including energy will shoot up. We will see more mexicans trying to cross the border mostly around Texas cuz there are no jobs for them in California.

Then Texas will see a jump in crime rate, more stolen cars kidnappings and robery.

God, bad news everywhere. Hopefully, none of those illegal Mexicans would carry the swine flu virus.

I think Texas has to increase the border security maybe a fence all across will do it

[MattS]

$this->bbcode_second_pass_quote('uNkNowN ElEmEnt', 'C')antarell Collapsing - Study Projects "Uneconomic" As Early As 2014 As Gas Cap Falls Rapidly

[Daniel_Plainview]

$this->bbcode_second_pass_quote('MattS', '')$this->bbcode_second_pass_quote('uNkNowN ElEmEnt', 'C')antarell Collapsing - Study Projects "Uneconomic" As Early As 2014 As Gas Cap Falls Rapidly

[MattS]

$this->bbcode_second_pass_quote('DoomWarrior', '
')Dear MattS.

Are you Matt Simmons?

[cephalotus]

$this->bbcode_second_pass_quote('pstarr', '.').. Mexico oil production (and consequently Mexican social fabric) is beginning its soon-to-accelerate decline. 40% of Mexican government revenue was dependent on the oil fields. Without that money the very poor (and there are lots because Mexico is a corrupt autocracy) will begin their own exciting new business revolution It will be called Marxism...

[Oerdin]

$this->bbcode_second_pass_quote('', '
')Cantarell Collapsing - Study Projects "Uneconomic" As Early As 2014 As Gas Cap Falls Rapidly

[Oerdin]

$this->bbcode_second_pass_quote('Plantagenet', 'S')ince the socialized PEMEX Mexican national oil company is failing fast, they can vote to reverse the half-century old nationaliization of Mexico's oil industry and allow private companies to come in and try to help find the remaining oil (if any oil companies are stupid enough to believe that they wouldn't be nationalized out of business again if they found some oil).

[TheDude]

My favorite piece on misdeeds with Petróleos Mexicanos: MEXICO: Pemex Oozes Corruption. Dave Shields wrote elsewhere that there about 11k employees paid to just sit on their butts.

Mexico's Woes: Quakes, Flu and Oil Production Collapse -- Seeking Alpha

$this->bbcode_second_pass_quote('', 'M')exican oil production fell 7.8 percent in the first quarter of 2009 to 2.667 million barrels per day. This means that production kept on falling right through February and March, as January’s production had already been recorded at 2.685 Mb/day. While it’s not impossible that through an unusual set of circumstances–say economic collapse that shuts production down to very low levels for some time–that Mexican production could rise back up briefly and touch previous high levels, it is unlikely. Besides, an outlier month or two back towards 3 Mb/day is not really what the Energy Ministry has in mind, in their cheery outlook for 2015. They are talking sustained production at 3 Mb/day. That is not going to happen.

In general, it is nothing less than astonishing that Mexico’s oil production collapse is not one of the biggest stories of the decade, especially for the United States. The trajectory here is on pace to take Mexico’s output from 3.4 Mb/day as recently as early 2005, to 2.4 Mb/day perhaps as soon as this Fall. That is not only a huge percentage for Mexico, but it’s a large percentage of total North American supply. If you believe as I do that geography is going to reassert itself in the years ahead, these declines are fated to unleash an even greater impact.

[jbrovont]

I have to admit I've been mulling over this constellation the past weeks. Such steep decline in Cantrell is worrying by itself, but add to that the feedback of diminishing government stability, and now a flu outbreak threatening regular commerce and daily routine... Not good.

I can't help but wonder if the media is waving the flu sparkler now so they can blame the decline in production on that. The swine flu has been devistating for those affected by it, but statistically, it's not really on the map yet, and has a long long way to go to get there.

Again, I'm not downplaying the human tragedy at all - just...why the explosion of media coverage? If you really want to get scared, there's a battle-hardened strain of TB that's festered in Africa for decades. It's now slowly creeping into every continent of the world and almost completely impervious to any drugs and, aparently, the human immune system "et. al." by some reports. At the moment we aren't hearing a peep about that, and it's been building for years.

On the other hand, even if this is just an unfortunate coincidence, throw in an earth quake and the panic buying that's now brought the JIT portion of the food supply (and certain other products) in Mexico to it's knees, and geological/technilogical declines in Cantrell might turn into a footnote.

Even if swine flu doesn't turn out to be a nightmare virus, sick workers and civil unrest from an already stressed system stricken by poverty and corruption - this whole thing is just getting ugly fast.

I'm sure I'm not the only one looking at this and thinking "hmm..."


$this->bbcode_second_pass_quote('TheDude', 'M')y favorite piece on misdeeds with Petróleos Mexicanos: MEXICO: Pemex Oozes Corruption. Dave Shields wrote elsewhere that there about 11k employees paid to just sit on their butts.

Mexico's Woes: Quakes, Flu and Oil Production Collapse -- Seeking Alpha

[rangerone314]

$this->bbcode_second_pass_quote('Ludi', '')$this->bbcode_second_pass_quote('Roy', '
')Mercenaries maybe?

[DantesPeak]

Cantarell continues its collapse, while its costs of operation increase:

$this->bbcode_second_pass_quote('', 'M')exico June oil output down 11.1 pct vs year ago
Sat Jul 25, 2009 4:04am IST

MEXICO CITY, July 24 (Reuters) - Mexican oil output fell below 2.6 million barrels per day for the first time since 1990 in June, hit by the relentless decline of the Cantarell field and maintenance, state oil monopoly Pemex said on Friday.

Oil production slid 11.1 percent compared to June 2008 to 2.519 million bpd. Exports of crude were down 12.7 percent at 1.236 million bpd over the same period, Pemex said.

The slide in production has prompted bond rating agencies to warn that the country's debt rating could be cut due to the government's heavy reliance on oil revenues.

Falling oil output has compounded the government's fiscal problems as it wrestles with a severe economic downturn that could be Mexico's worst recession since the Great Depression.

Output from Cantarell, once one of the world's most prolific oil fields, was 658,700 bpd in June, down 37 percent from a year ago. In addition to the natural decline of the field, planned work on a production platform at Cantarell in June cut output by 5,800 bpd.

[eXpat]

Mexico's Declining Oil Production: Clarion Call for Cantarell
$this->bbcode_second_pass_quote('', 'T')he eighth largest oil field in the world will be dead by the end of next year. Shall I repeat that, or did you get it the first time? Like the Time to Die Speech of Rutger Hauer at the end of Blade Runner, the Cantarell complex has surely seen its share of ocean storms, human hopes, and stars since its discovery by a humble fisherman in 1976. If you’re wondering whether that fisherman has a name, the man who saw oil floating on the surface of the ocean as he gathered his nets, the answer is yes: Rudesindo Cantarell.

The days when you could find a supergiant oil field while fishing are over. Cantarell came late, in the oil age. That meant this global giant would receive all the best doctoring modern technology could provide. The result is that Cantarell was pumped out effectively and hard, especially after the technique to re-pressurize the field was adopted. This allowed for a spike high of daily production to be captured for several years, late in its life when a field would otherwise go into gentle decline.

[RonMN]

Darn good thing they just sold hundreds of thousands of brand new cars

[TheDude]

I'd love to see a graph of Mexican field production, like this fantastic bit of work from Euan Mearns on the UK:



From The Oil Drum: Europe | Truth, Lies, Oil and Scotland

This is a simple overview, and only current to 2004:



The Reforma fields were discovered '72-75. Mexico's Cantarell field: how long will it last? | Energy Bulletin

Doubt Cantarell will completely grind to a halt; even Forties still produces ca. 60 kb/d. But it will be down enough to make the country a net importer.

itulip thread: mexico's largest oil field to die by 12/10- consequences? - iTulip.com

[DantesPeak]

We were warned (at least here), in a NAFTA Report I discovered offline. It turned out to be very accurate:

http://peakoil.com/post257647.html?hili ... ll#p257647

$this->bbcode_second_pass_quote('', '1')/17/06 Latin Am. Mex. & NAFTA Rep. (Pg. Unavail. Online)
2006 WLNR 1040889 Mexico & NAFTA Report Copyright 2006 Latin American Newsletters 17 Jan 2006

THE OIL INDUSTRY: Boom to bust?
The next government will have to make some difficult decisions about the oil industry. The decline in the country's main oilfield, Cantarell, is much more rapid than had been forecast. Under current projections, in 2008, the field will be producing only a quarter of what it has been producing over the past five years.

Over the past 20 years, Cantarell has been the world's fourth biggest oil field, producing over 2m bpd. Cantarell has supplied around two-thirds of the daily production of Petroleos Mexicanos, the state-owned oil monopoly. Mexico is the world's sixth biggest oil producer. The problem is that it is producing much more oil than it is finding. Ranked by reserves, Mexico comes 14th in the world league.

The latest projection from Petroleos Mexicanos Exploracion y Produccion is that in 2008 Cantarell's production will average only 700,000bpd while in 2009 output will drop to 520,000bpd. The concern for policymakers is that if this happens, Mexico will stop being an oil exporter. Currently the country produces about 3.3m bpd and exports about 1.8m bpd.

There are major differences between experts about how much oil Mexico has. What experts do agree on is that production from Cantarell is set to plummet. The big question is whether Mexico can find new oil reserves to stop its overall production collapsing. If Mexico's overall production collapses there will be major implications for government spending. In 2005 the government enjoyed windfall oil revenues of M$100bn (US$10bn), according to Alejandro Werner, head of the planning unit at the finance ministry.

[BigTex]

Mexico just legalized possession of small amounts of marijuana, heroin, cocaine and other drugs. (NYT Story)

Maybe it is one of many small gestures Mexico is no doubt taking to prepare for a less well-funded government in the future.

Just think how much it costs to chase around and lock up small-time drug users (I suppose a similar process is unfolding in California where a bankrupt government is just sort of opting out of certain traditional areas of social control).

I really have no idea how Mexico is going to remain a functional state when 40% or so of the government's revenue evaporates when it becomes a net oil importer.

I also wonder how Mexico is selling 10 year bonds with yields around 8%. Who is buying that debt? (Bloomberg Story)

[Tyler_JC]

The death of Cantarell is going to have massive implications for North American geopolitics, not just the world oil supply.

The Mexican government is only a few years away from bankruptcy.

$this->bbcode_second_pass_quote('', 'C')alderon’s administration will tap “additional” revenue and cut spending to offset the decline in oil revenue and a falling tax take, Oscar Franco, president of Mexico’s pension fund association, said today in an interview. The country’s sovereign credit rating will not be cut, Franco said.

“The solidity of Mexico’s government debt is sustainable,” Franco said.

The pension fund association, known as Amafore, represents funds that manage a total of 990 billion pesos of assets, two thirds of which are invested in Mexican sovereign bonds, Franco said.

[jeromie]

There is a lot more to the story about Cantarell. I can search out the links backing my comments. Pemex is short of Nitrogen for Enhanced Oil Recovery and has switched the Nitrogen pumped into other fields. They are at absolute maximum capacity in their Nitrogen Plant complex. Pemex also is going to introduce surfactant/foam EOR into Cantarell which they plan will increase total production from Cantarell by 3 bn bbl. On top of that Pemex is trying to fit the latest Miscible CO2 " State of the Art" and " Game Changer" later into their declining secondary production pools. Pemex expects over a couple decades to increase total pool production percentages to the 60 % range or more. They are camping onto recent US understandings and experience. Very extensive reporting on these details is featured on the US Department of Energy Website.

[TheDude]

$this->bbcode_second_pass_quote('jeromie', 'V')ery extensive reporting on these details is featured on the US Department of Energy Website.