Mexico's #1 Oil Field - Cantarell - Begins Decline Earlier Than Predicted

[hatrack]

March 1 (Bloomberg) -- "Petroleos Mexicanos, Mexico's state oil monopoly, said it expects production at its largest oil field to decline this year, earlier than previously forecast, and plans to boost investment by more than $1 billion from 2004 to make up for the shortfall at other fields.

Cantarell, which accounted for more than 60 percent of oil production last year, will produce an estimated 2.02 million barrels of oil in 2005, down from 2.11 million barrels per day in 2004, Vinicio Suro, planning director for Pemex's production and exploration unit, said on a conference call with investors. ``That means that we're going to begin the decline of production in Cantarell by around 80,000 or 90,000 barrels of oil'' per day, Suro said.

Pemex plans to invest as much as $11.5 billion this year, up from $10.1 billion in 2004, to boost production in other fields, including exploration of deep-water deposits for the first time, to make up for the Cantarell decline. Pemex has doubled its debt in four years to $45 billion to finance annual investments of about $10 billion."

EDIT

http://www.bloomberg.com/apps/news?pid=10000086&sid=aPgrH2d7FvKQ

[The_Casual_Observer]

1. Get used to this kind of news world wide

When was the last time you heard about new oil discoveries? The last one I remember was the North Sea back about 1980.

[hatrack]

3. There are some bulletins about minor (by historical standards) finds . . .

But by and large, it's been over 30 years since the discovery of the last two true elephants - discrete supergiant fields. The last two were Samotlor in the then-USSR in 1968 and Prudhoe Bay in 1969.

After that came the North Sea and its prolific, though generally somewhat smaller oil & gas fields (at least when compared to Samotlor). There, the UK sector peaked in 1999 and Norway (probably) in 2003 or 2004 - Norway's Directorate is still crunching the numbers on that, and emphasizing increased gas production as oil begins to tail off.

The Caspian Basin has, at least according to the accounts I've read, been something of a disappointment. It ended up a full order of magnitude smaller than the most optimistic estimates. Tenghiz, which is a long narrow series of fields, may come in at about 30 bbl, but nobody's really sure, and the extraction costs are ferocious, both in terms of access and exploration and for its high-sulfur crude.

[Webster Green]

2. Earlier than expected, eh?

Perhaps BushCo Inc. is doing a little slant drilling in the gulf.