Mexico’s Cantarell field is slated for continued declines in the 14% per year area, but for the next two years, total Mexican production will decline by a lesser amount as the new  Ku-Maloob-Zaap (KMZ) fields add to production. 

However, after 2010, both of these enormous fields are expected to be declining simultaneously, according to the report below.  The report does not comment on Mexico’s net exports, which will be declining even faster than production because of the rapid growth of domestic Mexican demand.   Mexico is the third largest supplier of oil to the U.S. after Canada and Saudi Arabia.    

Here is the report from the Oil & Gas Journal:

Eric Watkins
Senior Correspondent

LOS ANGELES, Feb. 7 — Mexico will face difficulties in producing crude oil over the coming 2 years, according to a media report, which claims that Cantarell and Ku-Maloob-Zaap (KMZ) fields will decline simultaneously in 2010.

"As we move toward that scenario," said El Financero newspaper, "Cantarell’s decline became more pronounced in 2007, when it stopped producing an average of 304,000 b/d. It declined by 234,000 b/d in 2006 and 101,000 b/d in 2005, the paper reported.

According to the paper, that reduction contributed to a drop of 174,000 b/d in the country’s total production in 2007, compared with a decline of 78,000 b/d in 2006 and 50,000 b/d in 2005.

Although KMZ’s oil production average increased by 123,400 b/d in 2007, representing a 30.6% increase over 2006, it is not offsetting much of Cantarell’s decline because its increase made up for only a third of the decline in Cantarell, El Financero said.

Officials at state-owned Pemex expect KMZ to reach its highest production level in 2010, averaging 800,000 b/d of crude oil. Thereafter, its decline will begin, along with that of Cantarell.

Pemex officials commented that Chicontepic, comprising onshore wells, could compensate for part of the decline in both fields. It currently produces 100,000 b/d, which could swell to 500,000 b/d by 2010.

"Nevertheless," El Financero said, "because of the characteristics of the terrain where Chicontepec is located, crude oil extraction will be very difficult."

According to Sener, the 2007-16 Crude Oil Market Outlook prepared by the Energy Information System of the Energy Secretariat, in any scenario—high or low—Cantarell’s production will average 917,000-921,000 b/d during 2006-16, with an average annual decline of 14.1%.

The Sener scenario says Chicontepec and KMZ will partially make up for expected declines in Cantarell, although it will be impossible to maintain production at the levels reached in previous years.

In Sener’s low scenario, it is estimated that Chicontepec will increase its production rate by 32%/year. The increase in volume by 2016, however, will be 360,000 b/d, compared with the figure obtained in 2006, "which would mean that this project would be incapable of making up for the drop in production at the exploitation and Cantarell projects."

El Financero concluded that, "in the scenario of decreasing energy production, a more pronounced decline is expected in the northeast marine region, where the most productive assets are found, and effects are also anticipated in the southwest marine and south regions, which will have reductions of 40% and 20%, respectively

Tags: energy investments

This entry was posted on Monday, February 11th, 2008 at 9:18 pm and is filed under Mexico, oil supply. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.