A report in The Financial Times today casts doubt on the ability of Mexico to develop new oil supplies to offset the declining Cantarell field that is scheduled to result in substantially lower Mexican oil production starting in 2010.  The left wing opposition party brought Congress to a standstill by physically occupying the building and not allowing business to proceed while there was consideration of a modest proposal by the Calderon government to provide incentives for foreign companies to help find and develop Mexican oil. 

“Denise Dresser, a political analyst in Mexico City, said: ‘I now hold out almost no hope for energy reform under this government.”

“The country’s oil industry needs urgent reform.  Pemex…has been reporting a fall in daily production for about 25 years and since 2004 it has lost about 400,000 b/d to just under 3 mb/d in November last year.”

“Most analysts consider the government’s proposals as ‘lite’ to begin with and, if it is so hard to approve such a timid reform, they now ask: what is the chance of any meaningful change?”

“They highlight the ruling out of joint-risk contracts in which private companies could be rewarded for a share of discoveries.  Instead, the government is proposing new contracts that provide bonuses when projects go well but without sharing any of the oil.”

Tags: peak oil energy investments

This entry was posted on Friday, May 2nd, 2008 at 11:07 am 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.