Will Mexico Soon Be Tapped Out?

A rapid demise of Cantarell, the country’s chief oil field, could pose a serious economic threat.

Output at Mexico’s most important oil field has fallen steeply this year, raising fears that wells there that generate 60% of the country’s petroleum are in the throes of a major decline.

Production at Cantarell, the world’s second-largest oil complex, in the shallow gulf waters off the shore of Mexico’s southern Campeche state, averaged just over 1.8 million barrels a day in May, according to the most recent government figures. That’s a 7% drop from the first of the year and the lowest monthly output since July 2005, when Hurricane Emily forced the evacuation of thousands of oil workers from the region
Though analysts have long forecast the withering of this mature field, a rapid demise would pose serious challenges for the world’s No. 5 oil producer. The oil field has supplied the bulk of Mexico’s oil riches for the last quarter of a century, and petroleum revenue funds more than a third of federal spending.

“Cantarell is going to fall a lot, and quickly,” said independent consultant Guillermo Cruz Dominguez Vargas, a former executive with Mexico’s state-owned oil monopoly, Petroleos Mexicanos, known as Pemex. “I can’t imagine the strain on this society if there is nothing to replace it.”

Los Angeles Times