Mexico oil production down yoy

[TheServant]

This plays into the long term iTulip thesis nicely in regard to oil. I'm sure this has been discussed, but here is an update on the continued sharp decline in production at Cantarell that began three or so years ago. This may be from geological limitations or Pemex shortfalls in development, but either way, it will put pressure on the supply of oil.

I suppose the worst case scenario is if Mexico's promises of increased oil production continue to prove wrong, as official statements during the past few years have almost without fail. In that case, exports from Mexico would end in the next several years.

Cantarell

[Mega]

Re: Mexico oil production down yoy

Thanks, this is Major.........I heard a lot of Peek oil guys saying watch Mexican output.........Zappta George was right!

Mike

[GRG55]

Re: Mexico oil production down yoy

This plays into the long term iTulip thesis nicely in regard to oil. I'm sure this has been discussed, but here is an update on the continued sharp decline in production at Cantarell that began three or so years ago. This may be from geological limitations or Pemex shortfalls in development, but either way, it will put pressure on the supply of oil.

I suppose the worst case scenario is if Mexico's promises of increased oil production continue to prove wrong, as official statements during the past few years have almost without fail. In that case, exports from Mexico would end in the next several years.

Cantarell

An old adage in the oil patch...the best place to find oil is where its already been found. There's lots more oil to be found and produced in Mexico...but as with other global sources it will take longer, cost more and produce at lower rates compared to the oil from Cantarell.

Halliburton to Drill 170 Chicontepec Wells for $159MM
by Peter Millard

Dow Jones Newswires

Thursday, July 23, 20

Petroleos Mexicanos has awarded Halliburton Co. a $159 million contract to drill 170 wells in Mexico's Chicontepec region, marking the Houston-based company's debut in an area where its main competitors have an established presence...

...Pemex's spending spree at the geologically-difficult basin hasn't yet added significant volumes of production. Still, Pemex expects the area to produce a quarter of Mexican output, or 737,000 barrels a day, by 2017...

...At the start of this year Pemex announced $2.3 billion in planned 2009 investments at Chicontepec.

The basin has expensive-to-produce pockets of oil on land in northern Mexico. The tricky geology offers opportunities to companies such as Halliburton, which market advanced drilling products and techniques to maximize production at difficult formations...




Pemex Struggles to Meet $20B Investment Target
by Peter Millard

Dow Jones Newswires

Thursday, July 16, 2009

Mexican oil giant Petroleos Mexicanos is struggling to meet an ambitious $20 billion investment plan for this year after it nearly quadrupled capital expenditures over the past decade...

...Pemex said on Wednesday it spent 88 billion pesos ($6.4 billion) during the first half of the year, or 38% of its $16.9 billion exploration and production investment budget.

Pemex's output has fallen by a fifth since peaking in 2004, and tumbled 7.9% during the first five months of 2009 from the year-ago period.

The company invested $15 billion in exploration and production in 2008, the same as oil majors BP PLC and Petrobras...

...One of the main targets is Chicontepec, an oil zone that spans three states in northern Mexico where it is expensive to get the oil out of the ground. Some lawmakers and analysts have criticized Pemex for investing heavily in an area where wells only produce a few hundred barrels a day at best, compared with up to 10,000 barrels a day at Cantarell wells.

Pemex also is investing heavily in seismic exploration as well to find more promising oil fields on land and offshore, but it takes years to bring production from new oil fields on line.

[GRG55]

Re: Mexico oil production down yoy

BTW: Chicontepec is a very large onshore oil field which covers more than 1200 sq miles, and contains potentially 70 billion barrels of light oil (about 31 API) in place. However this reservoir is tight (extremely low permeability) and in a populated area. Groppe Long in Houston [Henry Groppe's firm] estimates it may take as many as 16,000 wells to recover perhaps 11 billion of those barrels from Chicontepec.

[Mega]

Re: Mexico oil production down yoy

Mean while
http://www.theoildrum.com/node/2470
Mike