Mexico's Oil Output Has Peaked, Under Current Limitations
Posted on: Friday, 1 February 2008, 03:00 CST
By Payne, Stephen
Peak oil production occurred in Mexico in 2004-that is, under the limitations of current regulations-says George Baker, publisher of Mexico Energy Intelligence in Houston. Mexico's most important field, Cantarell, is in serious decline, and the recently announced KMZ and Chicontepec prospects are "suspect" as well, he says. A Pemex business-as-usual scenario is unlikely.
Despite a debottlenecking project in 1989 and nitrogen injection in 2000, Cantarell production peaked at slightly more than 2 million barrels per day. Consequently, Mexico's exports peaked at the same time, near some 1.88 million barrels per day. and have since fallen to just over 1.7 million barrels per day, according to Baker.
"The Mexican side of the deepwater Gulf of Mexico requires 80 oil companies, not just one oil company with 80 contractors." Any perceived threat of crossborder oil fields may provoke change in the Mexican government's energy policies. However, if the government changes the upstream rules, it could push Mexico's peak oil date out for several decades.
Mexican oil company Pemex's 10-year plan to drill 10,000 development wells and invest $24 billion to accelerate recovery of light and heavy crude oil from the Paleocanal de Chicontepec Field is a "highly speculative investment, given the adverse geological parameters of the field, the rapid annual decline rate of 50% and the low rate of initial production, typically below 150 barrels per day."
He adds, "oil exports have taken all of Cantarell production since November 2006, a worrisome trend for Pemex and its customers and government. Before, Cantarell supplied all of the export market plus a cushion of domestic use. Now that cushion is gone, and is likely not to return."
-Stephen Payne
Copyright Hart Energy Publishing, LP Jan 2008
(c) 2008 Oil & Gas Investor. Provided by ProQuest Information and Learning. All rights Reserved.
Source: Oil & Gas Investor
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