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Mexico Production and Reserves, 1H2018

Mexico Production and Reserves, 1H2018 thumbnail

Mexico oil production is in decline though, at the moment, not as steep as it was expected to be (at least by me – IEA predictions are closer).

Data is through June and comes from Pemex and National Hydrocarbons Information Center (CNIH) (both sites are pretty good).

For June C&C was 1870 kbpd, down 25 kbpd from May and 170 kbpd y-o-y. Yearly decline rates for each region are shown in the chart below. Production peaked in 2004/2005 at just over 3500 kbpd, so overall decline is approaching 50%.

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Most of the decline has been in light oil and condensate, with heavy oil holding fairly level.

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Ku-Maloob-Zaap

The largest producer is the Ku-Maloob-Zaap complex (KMZ), which has been kept on a plateau, contrary to predictions of a decline starting about now from a Pemex presentation in 2012. The production has been maintained mainly by increasing flow from the Maloob field, and it looks like this has resulted in increased nitrogen production. Ku and Zaap production has been maintained, but the Ku field is getting close to exhaustion now. Ku is a medium oil at API 22°, while Maloob and Zaap produce heavy oil at API 12°. The two types of oil are processed separately so it’s not clear that decline in Ku can be fully replaced by the heavier oil fields, which I think also require more nitrogen for voidage replacement. Nitrogen injection to maintain production there was started in 2014, which was also when overall production came off a temporary plateau and started the current steady decline period. It would be interesting to know how the total available nitrogen is apportioned to the fields; presumably the total available is fixed and therefore so too is the net voidage replacement capacity and hence the total amount of heavy oil that can be produced. The nitrogen gas produced is (again presumably) reinjected so local compression capacity would also be a limit, for example there is still a high amount of nitrogen produced in Cantarell for relatively low oil production and eventually the same fate must befall KMZ.

There’s a six day shut down planned for one FPSO operating on KMZ, which will knock 95 kbpd off, affecting July and August numbers.

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Regional Details

There are four producing regions in Mexico, two onshore and two offshore. The offshore regions are where most of the new drilling and developments are occurring. The onshore basins are mature, show clear creaming curves for drilling, and with few new wells have declines that are steady and almost linear at the moment. Even the two marine areas show evidence that they are in late life stages with declining flow in almost all the fields and creaming of the well numbers. The charts show production stacked but the cumulative completed wildcat and development wells are shown as normal trends.

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Note Akal is by far the largest contributor to Cantarell, other fields are almost negligible by comparison.

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Mexico Reserves

Oil

Remaining Mexico reserves have been falling continuously in all categories for several years. The chart shows estimates for oil reserves with 2P (i.e. ‘proven plus probable’, which is usually the best estimate for what is likely to be ultimately produced), with some of the larger fields highlighted, together with total P3 (‘possible’, which tends to decline to zero as a province plays out) and cumulative production since 1999, when data first became available. The offshore proportion of the 2P reserves is also highlighted. KMZ and Cantarell are still the fields with largest reserves, although Cantarell production is well below what might be expected given that its remaining reserves are nominally still enough to class it as a supergiant (and therefore possibly limited by nitrogen capacity – see above). Ek-Balam has been announced as a redevelopment and Abkatun was a large field, produced mostly in the 80s and 90s and now largely depleted.

The biggest reserve additions this year were for the Amoca, Mizton and Tecoalli shallow fields, which Eni is developing as a fast track project with early production planned for next year and ramping to 100 kbpd in 2021. These fields show 2P total reserves at 413 mmboe, and 3P at 706 mmboe, with most of the ‘possible’ additions being natural gas rather than liquids.

The current overall R/P ratio is a respectable 17 years, representing a rise after fairly consistent slight falls in recent years.

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There has been some excitement over the potential for significant deep-water discoveries, but so far there has not been much to show. What discoveries there have been presently only constitute P3 resources, as none of the fields have any firm development plans, and were revised down to a relatively minor 500 mmbbls from 780 mmbbls last year. There may also be some shale oil potential onshore but few exploratory wells have been drilled and I think no reserves booked so far.

Only three years since 1999 have had reserve replacement ratios greater than 100%. Many years’ numbers have actually been negative, some of them significantly so, and the estimated ultimate recovery has been revised slightly downwards overall.

Note I’ve labeled the years against the end date for which the reserves and production apply, which is how most countries report them, but Mexico labels them by the reporting year (i.e. one year later).

Natural Gas

Natural gas reserves have been declining faster than oil, both for ultimate recovery and those remaining, but flattened out this year because of some onshore discoveries. There might be more discovery potential for gas than oil, with extensions of some of the Texas shale gas plays onshore and the deep water sites maybe turning out to be more gas prone.

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Mexico Petroleum Imports and Exports

As the oil price has increased Mexico has returned to a neutral trade balance for petroleum related goods. The Mexican refining industry is running well below capacity; I think this is mainly because it cannot handle the heavier slate of domestic crude that has resulted as the light grades have been depleted faster, but also from general underinvestment on ageing plant. There have been attempts to open up the Mexico industry to foreign investment, but with limited success and some notably disappointing lease sales, and that effort may now reverse again with a recent change of government. The new Mexican president has said that he intends to end the import of foreign fuel within three years, that is not going to happen by a long way, and reverse the decline in oil production, that is not going to happen at all without several large and easily developed deep water discoveries and even then not in less than five to ten years – in fact some time during his second and third years the decrease from KMZ is likely to get very noticeable

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Off Topic Finish

Flying spiders – noted by Darwin on the Beagle. They get aloft by using the atmosphere’s electrostatic fields interacting with static on their silk strands, and use air currents to stay up and move around. They have been recorded as getting over two miles high and travelling a thousand miles. “Life, ah, will find a way.”

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Peak Oil Barrel by George Kaplan



12 Comments on "Mexico Production and Reserves, 1H2018"

  1. MASTERMIND on Mon, 20th Aug 2018 9:33 am 

    Dennis is a dumbshit who censored me and blocked me from his stupid site..He thinks we are going to transition away from fossil fuels in a fast transition like smartphones..

    How someone could run a peak oil blog and not understand its implications is mind boggling..

  2. MASTERMIND on Mon, 20th Aug 2018 9:35 am 

    Mexico Oil Reserves Gone in 9 Years Without New Finds

    https://www.bloomberg.com/news/articles/2017-03-31/down-10-mexico-oil-reserves-gone-in-9-years-without-new-finds

  3. JuanP on Mon, 20th Aug 2018 9:43 am 

    MM “Dennis is a dumbshit who censored me and blocked me from his stupid site..”

    Well, if he censored and blocked you he must not be completely dumb! LOL!

  4. Witmann on Mon, 20th Aug 2018 9:53 am 

    The degree of planned maintenance frequency for KMZ and Yúum K’ak’máab (a floating refinery)are increasing at considerable rate.(eight to nine month)

    Proven crude reserves were adjusted and reduced this year to only 6.4 billion barrels or nine years of crude reserves at current production levels.

    https://www.gob.mx/cms/uploads/attachment/file/311232/Presentacion._Reservas_1P_al_1-ene-2018_ODG_V3.2_dgr_vf.pdf

  5. Boat on Mon, 20th Aug 2018 4:47 pm 

    Mexico gov decisions have not been exceptional. Give the leases to American exceptionals and the oil will flow.
    PS along with hiring the US armed forces to take out the Mafia which plauges these poor third world countries.

  6. Boat on Mon, 20th Aug 2018 4:53 pm 

    Venz is no different, just in worse shape. They need a paid US intervention.

  7. Boat-tard on Mon, 20th Aug 2018 11:04 pm 

    Boat- it’s easy to be a warmonger when you’re ineligible to serve due to obesity and type 2 diabetic. You know where the recruiting office is. Go sign up tough guy. Fucking pussy.

  8. twocats on Tue, 21st Aug 2018 8:35 am 

    mexico is basically a US client state with an elite ruling class that makes the US look like Sweden. Venezuela has been the target of US economic and CIA warfare since Chavez took power. the US is extremely invested in having no viable alternative exist to the hellscape that is late-cancer capitalism. unfortunately people would rather die than live in this nightmare – which is why you see opiod death rates skyrocketing.

    death drive bitches.

  9. Davy on Tue, 21st Aug 2018 12:30 pm 

    “Texas Exports More Oil Than It Imports For First Time Ever”
    https://tinyurl.com/y9lyrdqa

    “The Texas Gulf Coast oil terminals sent abroad more crude than they received in April, the Energy Information Administration said this week. During that month, crude oil exports from the Houston-Galveston port district exceeded imports by 15,000 bpd. Over the next month, the advantage of exports over imports welled further, to an impressive 470,000 bpd.”

    “Total U.S. oil exports in may hit a record of 2 million bpd, with Houston-Galveston’s share of the total at a record-breaking 70 percent, from an average of about 50 percent since the middle of 2017, the EIA said.”

    “RBC goes further, expecting production in Texas to boom to more than 6.5 million barrels daily over the next seven to ten years. Not everyone is so optimistic, however. Skeptics believe the shale oil boom in Texas led by the Permian Basin, will peak at much lower levels than 6 million bpd, not least because of the substantial debt loads of many shale drillers in the area. Until this happens, oil production in the state is growing: over the 12 months to June it added 27 percent to 4.3 million bpd, according to the latest report from the Texas Alliance of Energy producers. This represented 40 percent of the U.S. total for that month.”

  10. GregT on Tue, 21st Aug 2018 12:53 pm 

    “Texas Exports More Oil Than It Imports For First Time Ever”

    Three and a half decades after the scientific community first began warning mankind about the consequences of continuing to burn fossil fuels.

    What’s not to like about that?

    Yeeee, haaaa!

  11. MASTERMIND on Tue, 21st Aug 2018 1:01 pm 

    Bragging about shale oil production is like baking cakes, and buying the ingredients for 10 dollars and then selling the cakes for 5 dollars..And bragging about how many cakes you sold..

    Shale is like the non fat yogurt of oil production..

  12. Pharmacy Online on Fri, 14th Sep 2018 9:48 am 

    Remaining Mexico reserves have been falling continuously in all categories for several years. The chart shows estimates for oil reserves with 2P (i.e. proven plus probable , which is usually the best estimate for what is likely to be ultimately produced), with some of the larger fields highlighted, together with total P3 ( possible , which tends to decline to zero as a province plays out) and cumulative production since 1999, when data first became available. The offshore proportion of the 2P reserves is also highlighted. KMZ and Cantarell are still the fields with largest reserves, although Cantarell production is well below what might be expected given that its remaining reserves are nominally still enough to class it as a supergiant (and therefore possibly limited by nitrogen capacity see above). Ek-Balam has been announced as a redevelopment and Abkatun was a large field, produced mostly in the and and now largely depleted.

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