Tuesday January 30, 2007

Mexico's oil output cools

peakoil.com -> rigzone.com :

Daily output at Mexico's biggest oil field tumbled by half a million barrels last year, according to figures released by the Mexican government. The virtual collapse at Cantarell - the world's second-biggest oil field in terms of output at the start of last year - is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell's daily output fell to 1.5 million barrels in December compared to 1.99 million barrels in January.

Mexico's troubles at Cantarell mirror the larger problems in the global oil market. Many of the world's biggest fields are old and face decline, which can be sharp and sudden. Like other big producers, Mexico is struggling to make up the difference because new big fields are in harder-to-reach places like the deep waters of the Gulf of Mexico.

The field's decline is expected to continue, if not worsen, this year, according to most estimates. That will subtract valuable oil from the world market, which is under pressure from rising demand by growing economies like China and India. It also means less oil headed to the U.S. from Mexico, which has long relied on Mexico as one of its top-three oil suppliers. "This is bad news for Mexico. The field is declining faster than even the government's pessimistic scenarios," says David Shields, an oil industry consultant in Mexico City who has been warning about Cantarell's collapse for the past two years.

See also :

1. Will Mexico soon be tapped out?
2. Fiscal crisis for Mexico as oil starts to dry up
3. Second largest oil field dying

(2007-01-30 13:10:39 SGT) [Energy] Permalink

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