Changing of the Guard: Pemex Production to Come from New Fields

Mexican oil production will fall to 2.7 million to 2.8 million barrels a day next year as the country’s main oil field continues to decline rapidly, Carlos Morales, the head of exploration and production at Petroleos Mexicanos, said Thursday.

Mexican output has slid by 20% since peaking in 2004, and officials warn that the country will see exports completely dry up over the next decade unless Pemex accelerates oil exploration in new areas such as the deep waters of the Gulf of Mexico.


The 2009 estimate is the latest in a series of downward revisions by Pemex. Last year the company planned to keep output above 3 million barrels a day for the next few years. Now Pemex expects average output of 2.85 million barrels a day this year, with more declines in 2009.

Morales, speaking to reporters following an event in Congress, said the decline is mainly due to lower output at the giant Cantarell oil field in the Gulf of Mexico.

Cantarell, one of the largest pools of oil ever found worldwide, is suffering from old age after nearly 30 years of heavy exploitation. Cantarell’s oil sits on top of a layer of water and below a layer of natural gas.

In recent years, natural gas has seeped into wells that used to produce oil higher up in the reservoir, and water is seeping into wells lower down, often forcing Pemex to shut water-producing wells because it has not installed water-separation equipment.

“This is our main problem,” he said.

Dow Jones Newswire