[BrazilianPO]

The numbers of january are in.

January 2006 3.810 MBd
January 2007 3.553 MBd
January 2008 3.323 MBd

http://www.pemex.com/files/dcpe/petro/eprohidro_ing.pdf

That is not good. 23% loss y-o-y for Cantarell? That is A LOT! I believe that number is worse than the most pessimistic predictions.

[shortonoil]

eastbay said:

Putting this new information into perspective, at this rate, Mexico becomes a net-importer in about 45 months.

In a world of almost zero spare capacity, it is going to be very difficult, if not impossible for the US to replace the lost supply we will soon be experiencing from Mexico’s troubles. This is especially disturbing since the US is obviously entering a serious recession.

Growth is the only way out of a recessionary economy, and growth requires increased oil usage. It looks like the pain of this development is going to be shared by many.

[DantesPeak]

Net exports dropping at almost a 10% rate per year, a rate that will accelerate as production drops.

February 21, 2008

Pemex Jan crude output down 5.9%

Mexico's state oil company Pemex produced an average 2.96Mb/d of crude in January 2008, down from 3.14Mb/d year-on-year, according to Pemex figures.

Pemex attributed the fall primarily to the natural decline of the Cantarell field, the company said in a statement.

Some 65.6% of crude produced in January was heavy, while 27.6% was light and the remainder extra light, according to the figures.

Of total production, 81.8% came from marine regions, with 15.3% from the southern and the remainder from the northern region.

Crude exports in the period were 1.43Mb/d, down 9.4% from 1.58Mb/d the year before.

Source: BNamericas.com

[newman1979]

Mexican crude exports to the US fell to 1.216 m/b/d if all the "America's" crude oil went to the US. Exports to Europe increased to 218,000 b/d. Mexican domestic crude consumption edged up on a yoy basis. Just a couple of years ago exports to the US reached 1.850 m/b/d.
What is the data saying? I think that rising Mexican demand, coupled with continued falling production, means that we can expect a decrease in crude exports to the US if exports to Europe continue at present rates.
We must also consider that Mexico imports around 400,000 b/d of refined gasoline products from the US. This means that we are only 800,000 b/d from a net zero of imports from Mexico. The decline rate from Pemex's data would be a 200,000 b/d annual decline which would make 2012 as the date of net zero imports from Mexico, rather than 2017 as Pemex postulates.

[eastbay]

The decline rate from Pemex's data would be a 200,000 b/d annual decline which would make 2012 as the date of net zero imports from Mexico, rather than 2017 as Pemex postulates.

Excellent calculations newman. Maybe even closer to 250,000 bbls/d.

2012 is 46 months from now. Could be sooner. We'll hear the snapping sounds begin in about two years.

A few months one way or another this magical date is coming along like a fast freight train.

[smiley]

It could be even sooner than that.

If you plot the data you see a dip in 2006

http://omrpublic.iea.org/supply/mx_to_ts.pdf

This was due to storm related outages. If you filter out that dip, the conclusion is that the decline has been accellerating throughout 2006 and 2007. That means that an even higher decline rate is likely for the years to come.

[newman1979]

We haven't had any recent news on the effect of nitrogen injection on oil production at Cantarell. Does anyone know of any effect, positive or negative, on crude oil production going forward?

[DantesPeak]

We haven't had any recent news on the effect of nitrogen injection on oil production at Cantarell. Does anyone know of any effect, positive or negative, on crude oil production going forward?

I haven't seen much news on this lately. This is the best 'recent' article I could find.

October 30, 2007

Pemex drills 160 wells in Q3, records 8 discoveries

Mexico's state oil company Pemex drilled a total 160 wells in the third quarter this year, up 9.6% from 3Q06, the CEO of Pemex's E&P subsidiary (PEP) Carlos Morales Gil said in a conference call to discuss Q3 results.

Growth came only from development wells, which were up 14.2% year-on-year to 145, while the number of exploratory wells drilled fell to 15 from 19 in 3Q06.

The drop in exploratory wells was primarily due to lower drilling activity in the Burgos project in northern Mexico.

Of the 145 development wells, four were in the Cantarell field and five in the Ku-Maloob-Zaap (KMZ) fields.

Pemex also completed 23 workovers and two pipelines in Cantarell as well as 22 workovers and three pipelines on KMZ.

Further, the company began nitrogen injection of 115Mf3/d (3.3Mm3/d) on the Ku field, which will make way for the reclassification of some probable reserves to proven reserves.

GOING FORWARD

Pemex aims to drill a total 17 development wells on Cantarell and KMZ in 4Q07 and continue installation of the nitrogen recovery unit (NRU) for Cantarell that will begin operations in 1Q08.

"Going forward with the development of KMZ, the startup of nitrogen injection in KMZ and the development of the Aceite Terciario del Golfo project plus the other projects - plus the exploration discoveries we've had this year - we expect by the end of the year to have a replacement ratio for proven reserves of 50%," Morales Gil said in the conference call.

The reserve replacement ratio of proved hydrocarbons was 41% in 2006.

BNamericas.com

Also their appears to be much opposition towards foreign development of oil fields:

Mexican leftists vow to blockade airports, highways if oil opened to private investment

By MARK STEVENSON

updated 3:47 p.m. ET, Sun., Feb. 24, 2008
MEXICO CITY - Thousands of followers of a former leftist presidential candidate vowed on Sunday to close highways, airports and government buildings across Mexico if the legislature opens the country's state oil industry to private investment.

Chanting "The country should to be defended, not sold," the demonstrators raised their hands and bellowed "Yes!" when asked if they would participate in blockades and a possible general strike against reforms to open the industry.

"The theft of the oil industry would leave open the risk of a violent confrontation, which would bring us more suffering, political and social instability," said their leader, Andres Manuel Lopez Obrador.

AP/MSNBC

[DantesPeak]

Cantarell's output expected to plunge; new nitrogen injection into Cantarell, expected to reduce plunge in output, to be complete by end of 1st quarter. We'll see how that works, apparently it's very expensive to set up.

Mexico's Pemex: Cantarell Output To Fall By Up To 20% In 2008

DOW JONES NEWSWIRES
February 29, 2008 11:20 a.m.

MEXICO CITY (Dow Jones)--Average output at Mexico's largest oil field will slide by as much as 20% this year as the field matures, forcing state-run Petroleos Mexicanos to compensate by boosting production elsewhere, a company official said on Friday.

During a Friday conference call with investors, Pemex Exploration and Production Director Carlos Morales Gil said output at the Cantarell field will range from 1.2 million to 1.3 million barrels a day this year, compared with an average of 1.5 million in 2007.

In January, Cantarell's output had already slipped to 1.27 million barrels a day, according to figures published by the energy ministry, down from 1.6 million barrels a day in the year-ago month.

Morales said Pemex will be able to stem the decline as soon as the company finishes installing new production equipment at the field. The energy ministry has said investment in Cantarell should reach $5 billion this year.

WSJ

[seahorse2]

Its interesting bc, from what I gather on this thread, the decline rate appears to be accelerating going from under 10% initially to now about 20%? If I remember correctly, Pemex, in that leaked report, had a worse case scenario of a 40% decline rate.

If Saudi Arabia is adding 500k barrels of crude, it seems we are losing this much in Cantarell, not to mention SA admitted decline rates in their existing fields of 8% per year

[memmel]

Its interesting bc, from what I gather on this thread, the decline rate appears to be accelerating going from under 10% initially to now about 20%? If I remember correctly, Pemex, in that leaked report, had a worse case scenario of a 40% decline rate.

If Saudi Arabia is adding 500k barrels of crude, it seems we are losing this much in Cantarell, not to mention SA admitted decline rates in their existing fields of 8% per year

This is the problem with modern oil extraction production rates can stay high right to 90% depletion and then its like falling off a cliff.

Pressure maintenance really help maintain production rates but I think most of the oil industry has not really come to terms with the fact recovery rates may have not changed all that much its just you now have a constant depletion rate through the life of a field.

Symmetric models of oil production have a underlying assumption that depletion rate declines as a percentage total URR and thus production rates decline smoothly this is probably not true.

[BrazilianPO]

Pemex numbers for February should have come out yesterday, but it looks like they were too busy preparing for the Easter holidays.

Next week I hope we will see some numbers.

[Mechler]

Pemex numbers for February should have come out yesterday, but it looks like they were too busy preparing for the Easter holidays.

Next week I hope we will see some numbers.

Meanwhile, this should give us all hope that Mexico's production will turn around

Mexico diverts Pemex's exploration cash

Mexico will divert a portion of state-run Pemex’s exploration budget to cover other financial needs, according to Mexican media.

[slick50]

Figures for Feb. 2008 are out, down about 7% from Feb.2007. Wonder how much worse it would have been if February of 2008 only had 28 days?

http://www.pemex.com/index.cfm?action=c ... ntentID=89

[newman1979]

The Feb. Pemex report also states that exports to the US were down 230,000 b/d from the first 2 months of 07, or 15.6%. We again notice that the export decline rate is roughly 2 times the production rate. Mexico is on a decline rate that will accelerate the time of being a net exporter of oil to the US to less than 4 years if the 2 year trend continues.

[BrazilianPO]

The Feb. Pemex report also states that exports to the US were down 230,000 b/d from the first 2 months of 07, or 15.6%. We again notice that the export decline rate is roughly 2 times the production rate. Mexico is on a decline rate that will accelerate the time of being a net exporter of oil to the US to less than 4 years if the 2 year trend continues.

The exports are falling like a brick. Since a peak on January/2006 at 2 mi bpd, they have fallen nearly 30% to 1.4 mi bpd - in just two years.

However, curiously, the value of the exports has risen about 5%. PeakOil looks like in full swing here. I would expect prices to go through the roof as production and exports drop. Even with economies tumbling, there will always be someone with the money to pay whatever is the price.

[memmel]

The Feb. Pemex report also states that exports to the US were down 230,000 b/d from the first 2 months of 07, or 15.6%. We again notice that the export decline rate is roughly 2 times the production rate. Mexico is on a decline rate that will accelerate the time of being a net exporter of oil to the US to less than 4 years if the 2 year trend continues.

The exports are falling like a brick. Since a peak on January/2006 at 2 mi bpd, they have fallen nearly 30% to 1.4 mi bpd - in just two years.

However, curiously, the value of the exports has risen about 5%. PeakOil looks like in full swing here. I would expect prices to go through the roof as production and exports drop. Even with economies tumbling, there will always be someone with the money to pay whatever is the price.

Make you wonder what the number is that would cause the US to forget about Mexico. I'm sure its above zero. I'd guess that at 500kbd or so of imports the US probably will start pulling out of various agreements. You have to think that once we can't get oil from Mexico a lot a political moves will become unwound.

For example we probably will have no problem shooting Mexicans trying to cross the border etc.

[Starvid]

Gah! Oil is fungible fungible fungible!

Google it!!!!

[Tanada]

Gah! Oil is fungible fungible fungible!

Google it!!!!

While that is 100% true Stravid USA foreign policy is DEEPLY influenced by whom we purchase our imports from. If you are not Saudi Arabia and you don't sell us much then you get far fewer perks than if you are KSA or sell us large volumes of petroleum. It isn;t about markets, it is about how the polliticians view the world.

[wisconsin_cur]

Gah! Oil is fungible fungible fungible!

Google it!!!!

While that is 100% true Stravid USA foreign policy is DEEPLY influenced by whom we purchase our imports from. If you are not Saudi Arabia and you don't sell us much then you get far fewer perks than if you are KSA or sell us large volumes of petroleum. It isn;t about markets, it is about how the polliticians view the world.

There is also the problem that was demonstrated last week with the rising price of rice and the Phillipines, which discovered that it is not a good thing to be the last importer trying to lock in supply (esp when you are also the largest importer of a particular commodity).

If there are already existing agreements in a world where supply cannot meet hypothetical demand, then someone has to loose. I'm not saying that we could not... encourage someone to break a previous agreement but at the very least it is risky and looks bad.