Mexico oil output slumps to near two-year low

Mexican crude oil production slid to its lowest level in nearly two years in May, while exports were their weakest in more than two decades, official data showed on Friday.

Crude output at state oil monopoly Pemex, which President Enrique Pena Nieto has pledged to reform in the coming months, fell to 2.51 million barrels per day (bpd) in May, its lowest level since September 2011, according to the company’s data.

Oil exports dropped to 1.03 million bpd, the lowest level of crude shipments since the national energy information system began publishing monthly export figures in 1990.

Pena Nieto plans to boost production at Pemex by attracting private investment to the company, though he faces opposition from traditionalists who have accused him of planning to sell out the industry to foreign oil majors.

Pemex has been a source of Mexican pride since the government nationalized the industry in 1938, and reform of Pemex has long been fraught with difficulties.

The government aims to present its Pemex plan by September and officials say it is likely to contain a blueprint to allow profit-sharing between Mexico and private firms in exchange for the latter taking on exploration and production risks.

Mexico, the world’s No. 7 oil producer, has seen output drop steadily from a peak of 3.4 million bpd in 2004. Over the same period, export volumes are down by over a third.

Pemex officials did not immediately returns calls seeking comment on the May output and export figures.

If the country cannot find and exploit new discoveries to replace declining output at its largest, aging fields, Mexico risks becoming a net importer of crude within a decade.

Reuters