[Maddog78]

Mexico has always been a closed shop for international oil and service companies.
This group is saying they should change that.
It is most likely the only way they can halt or slow down their production decline.

http://www.ogj.com/index/article-display/5662718584/s-articles/s-oil-gas-journal/s-exploration-development/s-articles/s-mexico-institute_recommends.html

Mexico institute recommends upstream opening


Published: Jul 27, 2009
By OGJ editors
HOUSTON, July 27 -- The Mexico Competitiveness Institute (IMCO) has called for dramatic policy steps to confront Mexico's decline in the world economy.

The institute, which studies the relative competitiveness of 48 countries, reported that Mexico had fallen two places in the ranking to 32nd in the 3 years ended in 2007. Worse, it said that Mexico had retreated in eight of the 10 key variables that matter most.

Regarding energy policy liberalization, Mexico was the only country that scored zero on IMCO's index scale of zero to three.

The institute also took note of the fall in Mexican oil production, which since 2004 represented a 700,000 b/d drop that has been a severe blow to public finances.

Mexico may be facing its last opportunity to counter the trend—that is, before the aging of the Mexican population and the spread of poverty render societal changes irreversable.

snip....................

[newman1979]

Pemex Output Goal ‘Uphill Battle,’ Forces Borrowing (Update2)

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By Andres R. Martinez

[quote][/quote]July 31 (Bloomberg) -- Petroleos Mexicanos, Latin America’s largest oil company, is likely to miss its 2009 output goal even after lowering its production forecast, forcing the company to seek other sources of financing to pay for its largest-ever capital spending plan.

Pemex, which hasn’t increased production in 3 years, needs to raise output by at least 1.6 percent in the final six months of 2009 to reach a goal of 2.65 million barrels a day, according to data compiled by Bloomberg. Mexico City-based Pemex lowered its forecast yesterday on an earnings conference call.

Last year, Pemex’s output fell at the fastest rate since World War II, costing it more than $20 billion in potential sales amid record crude prices. Pemex cut its forecast three times last year as its then-largest field, Cantarell, dropped more than twice as fast as government predictions.

“It is an uphill battle to surpass the natural decline in Cantarell,” Gianna Bern, president of Brookshire Advisory and Research Inc., said in an interview yesterday from Flossmoor, Illinois. “Given bureaucratic delays, it could impede efforts to increase production. It is not very likely.”

Output has fallen since July 2006 for 35 consecutive months as Cantarell, once the world’s third-largest field, loses pressure and becomes increasingly difficult and expensive to exploit....

Production dropped 41 percent to 604,498 barrels a day at Cantarell in June, Mexico’s Energy Ministry said.

[size=85][/size]

It was previously reported at 658,700 b/d by reuters.

[mcgowanjm]

Output has fallen since July 2006 for 35 consecutive months as Cantarell, once the world’s third-largest field, loses pressure and becomes increasingly difficult and expensive to exploit....

Production dropped 41 percent to 604,498 barrels a day at Cantarell in June, Mexico’s Energy Ministry said.

[size=85][/size]

It was previously reported at 658,700 b/d by reuters.

I remember when Prudhoe Bay put out numbers like this.

Dragon-King appears as Black Swan ignored.

[TheDude]

Missed this, from the 31st: Calderon announces crackdown on fuel theft during Reynosa visit | reynosa, theft, announces - Now - TheMonitor.com

REYNOSA — Mexican President Felipe Calderón visited Reynosa on Thursday afternoon and announced an ongoing effort against criminal organizations that have stolen fuel from Pemex for years.

The president was here to mark the opening of two cryogenic plants that will increase Mexico’s gas production — reducing the country’s dependence on Texas.

“We could not avoid a subject which we all knew about,” Calderón said about organized crime. “It was a stone that the whole world took turns with. … Now it’s taking place in Pemex.”

"Estoy conmocionado - chocado - el juego que está sucediendo en este casino!"

According to the Mexican military, the navy, the federal police and the attorney general, the regions in which the most illicit activity occurs are Tamaulipas, Veracruz, Nuevo León and Mexico City, where officials have detected more than 400 fuel thefts.

“The time has come to stop milking Pemex through the theft of fuel,” the president said.

Gory details coming soon to the MSM: Feds to Expose Theft of Mexican Oil - CBS News

[Maddog78]

According to the Mexican military, the navy, the federal police and the attorney general, the regions in which the most illicit activity occurs are Tamaulipas, Veracruz, Nuevo León and Mexico City, where officials know this for sure because they are the biggest thiefs.

[DantesPeak]

Originally posted in this thread on August 22, 2007:

Sweet dreams:

Pemex Expects Peak Chicontepec Output of 470,000b/d
BNamericas Wednesday, August 22, 2007

Mexican state oil company Pemex expects its Chicontepec oilfield in Veracruz and Puebla states to reach peak production of 470,000b/d in 2014, newspaper El Norte reported, citing Pemex sources.

The field produced 23,000b/d in the first six months of 2007, but Pemex is hoping the field will ultimately help offset the natural decline of the Cantarell field, which produces roughly half Pemex's crude output.

With this goal in mind, Pemex aims to invest 164bn pesos (US$14.7bn) in Chicontepec in


2008-17, with annual investment hitting a peak of 26.2bn pesos in 2011.

The first five years of investment are expected to total 114bn pesos, with the second five years reaching 48.8bn pesos.

A consortium led by US oilfield services company Schlumberger (NYSE: SLB) won the first Chicontepec service contract in 2003, which initially featured a 200-well drilling program. Schlumberger recently signed a US$1.4bn contract for the drilling of 500 wells on the field.

Pemex estimates Chicontepec has probable reserves of 8.70Bboe, the paper reported.

Rig Zone

Sweet dreams of Chicontepec in 2007 have faded away, and all that's left is a never ending nightmare of Cantarell's depletion and the last fading glimmers of the oil age in the waters offshore Mexico.

http://uk.reuters.com/article/idUKN0739 ... 0?rpc=401&

Mexico gov't doubts mount on Chicontepec oil project
Mon Aug 10, 2009 6:46pm BST


MEXICO CITY, Aug 10 (Reuters) - The multibillion-dollar megaproject that Mexico hopes will turn around its slumping oil industry is being questioned by some officials as results fall short, according to a source familiar with the issue.

State oil monopoly Pemex [PEMX.UL] has banked on an $11 billion plan to tap the unconventional Chicontepec crude deposit to shore up output as yields at other fields plummet, sending Mexican oil production to near 20-year lows.

However, Chicontepec was producing only 30,800 barrels per day in June, a modest rise from December. After years of missed targets and with $3.4 billion already sunk into the project by the end of last year, grumbling about its cost is growing.

[newman1979]

588,210 barrels a day from Cantarell in July, according to data published by the Energy Ministry today. [quote][/quote]
Pemex reported July data today. Crude production fell to 2,561 m/b/d. Cantarell has fallen from 2.1 m/b/d in 2004 to 588,210 b/d in July 09. Exports to the US were also reported lower by about 5% from June, but down 33.7% from July 07 and 13.4% from July 08. The US gets 621,000 b/d less from Mexico then it got in July 07. At this rate, Mexico will cease being a net exporter to the US in less than one year as the US exports 400,000 b/d of refined oil products to Mexico at approximately twice the price on a barrel of Mexican crude.

1010000 7.2008 This fall in Cantarell crude production represents an almost 41% fall from July 08.

[mcgowanjm]

At this rate, Mexico will cease being a net exporter to the US in less than one year

They should've cut us off by January. But as usual are
letting the Bottom 90% take the hit.

BTW Mexico has called off it's attempt to take over
the drug trafficking. Didn't work.

[lowem]

There's an article on seekingalpha.com that had a couple of things to say about Cantarell :

1. The eighth largest oil field in the world will be dead by the end of next year.
2. “That field could head below 500 thousand barrels a day (kb/day) by the end of this year.”

Wasn't too long ago that Cantarell was supposed to be the second largest field, was it? Below 500 kbpd would be quite a drop from over 2mbpd at its peak. That'll be a milestone to look out for.

[DantesPeak]

Investment in Chicontepec is showing poor returns - to put it nicely:

Pemex has 'doubts' about Chicontepec

Thursday, 10 September, 2009, 18:10 GMT

Mexican energy giant Pemex needs to find a profitable way to develop its Chicontepec field, newly appointed chief Juan Jose Suarez Coppel said.


There are “certainly doubts” about the field’s profitability and the technology that should be used, said Suarez Coppel

“Chicontepec has a great potential, and we have to keep investing to find a way to exploit it in a profitable manner,” he said today in a Radio Formula interview.

The government is “evaluating” its $11.1 billion Chicontepec investment after the field missed production targets, Energy Minister Georgina Kessel told Bloomberg last week.

Pemex in June cut its forecast for the onshore field to 60,000 barrels per day by year-end, down from a previous prediction of 72,000.

http://www.upstreamonline.com/live/arti ... genews_rss

[newman1979]

Pemex reported August numbers today. Crude production was reported at 2,542 m/b/d down 19,000 b/d from July 09 and exports to the US were down about the same. Cantarell crude production was off slightly from July but was 41% lower on a year over year basis.

[mcgowanjm]

There's an article on seekingalpha.com that had a couple of things to say about Cantarell :

1. The eighth largest oil field in the world will be dead by the end of next year.
2. “That field could head below 500 thousand barrels a day (kb/day) by the end of this year.”

Wasn't too long ago that Cantarell was supposed to be the second largest field, was it? Below 500 kbpd would be quite a drop from over 2mbpd at its peak. That'll be a milestone to look out for.

Those are my quotes, and someone needs to alert Leanan cause her PO News site has Cantarell stabilizing. Some one's wrong:

"That'll be a milestone to look out for." LOOK OUT ;}

Now, according to a September 9, 2009 article in the Wall Street Journal, Cantarell is down to 500,000 barrels per day. (presumably for August 2009, and not yet plotted on the above graph). This represents a 30 % drop over only 4 months, which far exceeds the last calculated decline rate of 35 % PER YEAR.

http://peakopps.blogspot.com/2009/09/cantarell-update-september-2009-peak.html

[mcgowanjm]

Another source:

Pemex, Mexico's state-run oil company, announced that production at the once-mighty Cantarell field has fallen to approximately 500,000 barrels per day. If you don't think that's a big deal, keep in mind the Cantarell field was pumping out more than 2.1 million barrels of crude oil just four years ago.

The company announced the loss of oil exports as costing Mexico roughly $14 billion a year in revenue. That's a hefty chunk of change, considering 40% of the country's budget comes from oil.http://www.energyandcapital.com/articles/natural-gas-global-oil-production/950

And how far off the "Optimistic" have been:

Aug. 28 (Bloomberg) -- Petroleos Mexicanos, the state-owned energy company, expects production at its largest oil field, Cantarell, to decline over the next few years and then stabilize at about 500,000 barrels a day. Chief Executive Officer Jesus Reyes Heroles said the declines at Cantarell will level off by the end of President Felipe Calderon's term in 2012.

That's Aug. 28 of 2008.

I'm guessing that El Presidente is still in office? ;}

[eastbay]

http://www.reuters.com/article/companyN ... 9220091023



Here it is. Hot off the press:

September, 2009 production is up from last August, but down from September, 2008. Most telling is that Cantarell production is still falling by 14.3% at an annualized rate.

Output from Cantarell was 642,371 bpd in September, down from 650,154 bpd in August.

[mcgowanjm]

Output at state-owned oil monopoly Petróleos Mexicanos's offshore field Cantarell, once the world's second-largest oil field, has plunged to 500,000 barrels a day from its peak of 2.1 million in 2005.

And this:

Carlos Morales, head of Pemex's exploration and production division, says Cantarell is expected to stabilize at 400,000 barrels a day. The company has offset some of Cantarell's decline by raising output at other fields, notably offshore field Ku-Maloob-Zaap -- now Mexico's biggest field -- which produces roughly 800,000 barrels a day

http://online.wsj.com/article/SB125252454300296743.html

[Maddog78]

link

Looks like Mexico will slow down on pissing away a bunch of their n. gas. This has always struck me as such a waste.
It happens in other countries too. If they don't have the infrastructure to handle it for various reasons, it just gets flared so they can produce the oil. Not every country can use it or afford a pipeline and LNG plant.

Mexico Commission Cracks Down on Pemex's Flaring of Gas by Lawrence Iliff,Dow Jones Newswires,Friday, Nov 27, 2009:
MEXICO CITY (Dow Jones)--A Mexican energy commission said it will enforce strict new rules to reduce the flaring of natural gas by state-run oil giant Petroleos Mexicanos, or Pemex.

The National Hydrocarbons Commission said the regulations, which go into effect Dec. 1, will cut the burning of gas associated with crude oil production from 17% in 2009 to 0.6% by 2024.

That final percentage is the minimum economically and technically viable and also is the standard used by the top oil firms in the field, the commission said in a statement.

Traditionally, Pemex has flared associated gas because the firm was focused on maximum oil production and didn't see the flaring as waste since the gas required no additional investment to produce, said the commission, part of the Energy Ministry.

[Quinny]

Yet another glorious example of market efficiency.

[Maddog78]

Nature of the beast I'm afraid, can't be helped in many situations.
Like I said before it may not be enough to build a pipeline to or an LNG plant to get it to a market where it is worth something.
If you want the oil you have to flare the gas.
Still, it feels shitty to be standing there watching a well in the desert in the ME flaring off a small fortune worth of gas if that well was in your backyard in Alberta, Texas or Oklahoma or somehwere like that where it could be easily run into the newtwork.

[Quinny]

It can't be beyond the wit of man to rig up a rig based compressor of some kind. Probably 'cheaper' not to!

[dorlomin]

Nature of the beast I'm afraid, can't be helped in many situations.
Like I said before it may not be enough to build a pipeline to or an LNG plant to get it to a market where it is worth something.
If you want the oil you have to flare the gas.
Still, it feels shitty to be standing there watching a well in the desert in the ME flaring off a small fortune worth of gas if that well was in your backyard in Alberta, Texas or Oklahoma or somehwere like that where it could be easily run into the newtwork.

Couple of technical questions, is it not feasible to reinject the methane especialy into the gas cap of an oil field in order to prevent flairing and allow recovery at a later, more profitable date (I can see this would only be done with legislation not by company choice).

Is it not possible to transport LNG by rail? Some stranded gas could be recovered that way.