Mexico State Oil Co Optimistic On Two Largest Fields

Mexico’s state oil company has a sunnier outlook for its two largest fields, thanks to remediation programs to squeeze as much oil as possible from the crude-laden waters of the Campeche Sound, Petroleos Mexicanos executives said at an oil conference Thursday.

At Cantarell, one of the largest oil fields ever found, output has slipped to around a third of peak levels, but Pemex executives see the rate of decline starting to stabilize. At Ku Maloob Zaap, which recently surpassed the aging Cantarell as Mexico’s biggest producer, Pemex executives have a much more robust production outlook than what the company was expecting as recently as early this year.
Together the fields produce over half of Mexico’s 2.7 million barrels a day in output, putting pressure on Pemex to improve project management in both areas. The fall in Cantarell was cited by industry experts as a factor that contributed to the oil-price rally in 2008, and if it continues declining at current rates, it will reduce Mexico’s exports to the U.S.

At Cantarell, Pemex is starting to correct past negligence. Pemex production manager Miguel Angel Lozano said the company is reopening wells that produce significant volumes of water that were shut in recent years. Oil companies have separated water from oil for a century, but Pemex was blindsided by the problem a few years back.

The reopening of water-saturated wells hasn’t yet registered in monthly production data. In April, Cantarell pumped 713,036 barrels a day, down from 754,063 barrels a day in March and over 2 million a day during peak production in 2004, when the country pumped 3.38 million barrels a day on average.

An industry executive who works at Cantarell said Pemex is still grappling with water and natural gas issues at the reservoir.

“The problem is still there,” he said.

Wall Street Journal