[eXpat]

Cantarell Update & Production Projection link

$this->bbcode_second_pass_quote('', 'Q')uoting the article, "According to Sener, the 2007 - 16 Crude Oil Market Outlook prepared by the Energy Information System of the Energy Secretariat, in any scenario - high or low - Cantarell's production will average 917,000 - 921,000 b/d during 2006-16, with an average annual decline of 14.1 %."

[Aaron]

Mexico is facing a very difficult challenge with declining oil production coupled with soaring prices on imported agricultural products (especially corn - thanks ethanol producers). That wall we are building might begin looking like a good idea at some point.

Imagine impoverished Mexico without oil revenues coming in, while their most important staple food item becomes too expensive for millions to afford. Can you say illegal immigration?
I knew you could.

[killJOY]

$this->bbcode_second_pass_quote('', 'C')an you say illegal immigration? I knew you could.

[shortonoil]

With 60% of Mexico’s foreign exchange currency coming from oil, it looks like maybe Mexico will be the first modern industrialized civilization to collapse.

NEXT!

[EnergyUnlimited]

$this->bbcode_second_pass_quote('shortonoil', 'W')ith 60% of Mexico’s foreign exchange currency coming from oil, it looks like maybe Mexico will be the first modern industrialized civilization to collapse.

NEXT!

[Cabrone]

$this->bbcode_second_pass_quote('Killjoy', 'H')ow about "tsunami of desperate flesh.

[mos6507]

$this->bbcode_second_pass_quote('Cabrone', '')$this->bbcode_second_pass_quote('Killjoy', 'H')ow about "tsunami of desperate flesh.

[joewp]

I guess this belongs here, too. I like tacos, but not Taco Bell.
Oil & Gas Journal
$this->bbcode_second_pass_quote('', 'M')exico oil production decline to increase in 2010 by Eric Watkins Senior Correspondent
LOS ANGELES, Feb. 7 -- Mexico will face difficulties in producing crude oil over the coming 2 years, according to a media report, which claims that Cantarell and Ku-Maloob-Zaap (KMZ) fields will decline simultaneously in 2010.

"As we move toward that scenario," said El Financero newspaper, "Cantarell's decline became more pronounced in 2007, when it stopped producing an average of 304,000 b/d. It declined by 234,000 b/d in 2006 and 101,000 b/d in 2005, the paper reported. According to the paper, that reduction contributed to a drop of 174,000 b/d in the country's total production in 2007, compared with a decline of 78,000 b/d in 2006 and 50,000 b/d in 2005.

Although KMZ's oil production average increased by 123,400 b/d in 2007, representing a 30.6% increase over 2006, it is not offsetting much of Cantarell's decline because its increase made up for only a third of the decline in Cantarell, El Financero said. Officials at state-owned Pemex expect KMZ to reach its highest production level in 2010, averaging 800,000 b/d of crude oil. Thereafter, its decline will begin, along with that of Cantarell.

[Cashmere]

$this->bbcode_second_pass_quote('', 'P')roduction at the Gulf of Mexico development dropped 34 percent in May from a year earlier, the biggest decline since October 1995, according to data compiled by the government and Bloomberg. That was when Hurricane Roxanne's 131 miles-per-hour (114-knot) winds shut down offshore wells for a week.

[Interfector]

34%!? Jeez.

[cipi604]

Doomers scary porn, imagine Ghawar in such a decline.

[DantesPeak]

David Shields, also quoted in the lead Bloomberg article above, is the number one expert on the decline of Cantarell.

Here is what he said recently, transalted from Spanish. While Mexico may continue to export crude until the 'distant' year 2012, it may be become a net importer by 2010 - being that the amount of its diesel and gasoline imports are increasing rapidly.

$this->bbcode_second_pass_quote('', 'J')uly 3, 2008

Mexico: Energy Analyst David Shields Sees 'Difficult Scenario' Ahead For Pemex

The future outlook for petroleum revenue "does not look good," because "we have already spent our petroleum wealth" by overexploitingCantarell, and "before 2012 Mexican Petroleum (Pemex) will be a net importer of hydrocarbons, i.e., its export volume will not offset the value of itsimports. But the country will be a net importer earlier, because we need toinclude private imports. Therefore, "the best thing would be to prepare ourselves to stop being an oil exporting country and be aware of the implications for the public finances."

I want to come back to this reflection by Rogelio GascaNeri, expressed in the Senate of the Republic last week, because it describes the exact magnitude of a problem that many experts still do not want tobelieve, at a time when Pemex is the ball in a political game in the middle ofa power struggle. The reason why many people are reluctant to believe that theoutlook could be so negative is the fact that the official discourse denies it.

Pemex says that crude oil production will remain close to 3million barrels per day (and a few months ago it was saying 3.2 million), but the reality is that it has already dropped to 2.8 million and continues tofall. With the lack of easily extractable discoveries, everything indicates thatit will drop to between 1.9 million and 2.2 million by 2012. Theoverexploitation of the other oil fields will not solve the problem, but rather will worsen it. And the new refineries (if it makes sense to build any) willhave to process imported crude.

We are facing a typical case of a country that has reached and passed the zenith or "peak" of its oil production, so there is no money tosolve the problem. Today's oil prices hide the deterioration of the productionand export indicators, but when there is no longer any oil to export, oil prices will no longer get us out of this mess, but rather the opposite will occur.

For some time now, the official production forecasts havebeen very unreliable. Just four years ago, Pemex was predicting that crude oilproduction in 2008 would be 4.3 million barrels per day, when it is 2.8 milliontoday. The difference between those figures - a huge margin of error, understandable only because of the eagerness to send positive messages to theoil market - is equivalent to the total production of Libya or Algeria, whichare OPEC member countries.

So, why not believe that it could decrease by an additional 1 million barrels per day? A drop of that magnitude at the price of $110 perbarrel, according to Gasca's calculations, is equivalent to $40 billion a year,5% of GDP, and almost 20% of federal expenditures. In 2012, "with production at 2 million barrels per day and dropping, we will have to pay for the Pidiregas [Deferred Spending Investment Projects] and the labor liabilities. When this happens, the solution will be to try to implement another fiscal reform, but that will be a hard row to hoe."

[Cashmere]

I have, in fact, imagined Ghawar in such a decline.

I've been thinking (and posting) for some time that I think KSA will top 10% decline when the ball gets rolling.

We may never know it, but I think that's what will happen.

The old models of decline don't work well because we've gotten so much better at forcing production.

[nobodypanic]

$this->bbcode_second_pass_quote('', 'J')uly 7 (Bloomberg) -- Crude output from Mexico's Cantarell, the world's third-largest oil field, is falling at the fastest pace in 12 years as investment limits keep state-owned Petroleos Mexicanos from fully exploiting deposits and finding new ones.

[misterno]

Oh god. Peak Oil is coming...

Sooner than anyone expected. What a nightmare

[Last_Laff]

$this->bbcode_second_pass_quote('misterno', 'O')h god. Peak Oil is coming...
Sooner than anyone expected. What a nightmare

[Interfector]

$this->bbcode_second_pass_quote('nobodypanic', '')$this->bbcode_second_pass_quote('', 'J')uly 7 (Bloomberg) -- Crude output from Mexico's Cantarell, the world's third-largest oil field, is falling at the fastest pace in 12 years as investment limits keep state-owned Petroleos Mexicanos from fully exploiting deposits and finding new ones.

[ROCKMAN]

I can't qualify reports I've gotten from expat service company hands but between sips of Lone Star beer they describe the following: the nitrogen that Pemex has been injecting for 10 years to keep the reservoirs pressured up and flowing is starting to be produced with the oil (an inevitablility). Normally an operator would shutin such wells to maintain the pressure bank even though it means loosing the oil production from those wells. Instead, they continue producing the oil and N2 which reduces the pressure bank which, in turn, hurts ultimate recovery. Pretty much the same with all secondary recover efforts: the faster you produce the lower the ultimate recovery. Your basic rock and hard place.

Regarding becoming a net importer I wonder to what degree. Last I heard oil provided the gov't with 60% of its income. As that dries up how are they going to pay for imports. Much of the country exists now with substantial flour subsudies. I remember about 30 years ago when the Mex gov't tried to cut back on the flour (tortilla) subsidy and there were riots and a few deaths. It's not difficult to imagine immigration northward becoming more a matter of survival then economic betterment.

[nobodypanic]

$this->bbcode_second_pass_quote('Interfector', '')$this->bbcode_second_pass_quote('nobodypanic', '')$this->bbcode_second_pass_quote('', 'J')uly 7 (Bloomberg) -- Crude output from Mexico's Cantarell, the world's third-largest oil field, is falling at the fastest pace in 12 years as investment limits keep state-owned Petroleos Mexicanos from fully exploiting deposits and finding new ones.

[Cashmere]

$this->bbcode_second_pass_quote('nobodypanic', '')$this->bbcode_second_pass_quote('', 'J')uly 7 (Bloomberg) -- Crude output from Mexico's Cantarell, the world's third-largest oil field, is falling at the fastest pace in 12 years as investment limits keep state-owned Petroleos Mexicanos from fully exploiting deposits and finding new ones.