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Some Color on Cantarell’s Decline
Mexico’s Cantarell oil output falls again in July
Tue Aug 26, 2008 12:19pm EDT
MEXICO CITY, Aug 26 (Reuters) - Crude output from Mexico’s struggling Cantarell oil field fell for the 10th month in a row in July to 974,000 barrels per day, energy ministry data showed on Tuesday.
The fading jewel of Mexico’s oil industry, Cantarell is now producing half what it was yielding at its 2004 peak, pulling down overall output in the world’s No. 6 oil-producing nation and threatening Mexico’s status as a top U.S. supplier.
The steady decline of around 15 percent annually in the field’s output has pressured the divided Congress to tweak laws in the closed energy sector. The government, with backing from centrists, hopes to push a bill through congress to allow more private participation in the state-run oil business.
The conservative government’s proposal seeks to shore up flagging output and reserves by having the national monopoly Pemex hire private companies under incentive-fee contracts, particularly in costly high-risk areas like deepwater oil.
Output at Cantarell, a shallow field in the southern Gulf of Mexico, fell again in July from 1.018 million bpd in June.
Cantarell, for years the source of 60 percent of Mexico’s crude, accounted for 35 percent of Mexico’s overall July oil output, down from 36 percent in June.
A senior Pemex executive said in July that output at Cantarell would drop to just 600,000 bpd by 2012.
While lawmakers debate bringing in more private investment, which is politically sensitive, Pemex is trying to increase output at less productive fields, such as the offshore Ku Maloob Zaap complex and the onshore Chicontepec field.
Seismic tests indicate there could be huge deep-sea oil deposits in the Mexican Gulf. But with laws against foreign partners, Pemex executives say it could be 20 years before Mexico is producing substantial quantities of deepwater oil.
(Reporting by Cyntia Barrera Diaz; Editing by David Gregorio)
Tags: peak oil energy investments
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9 responses so far ↓
1 paultaut // Aug 27, 2008 at 9:28 pm
ho, ho, berry, berry.
Gustav is looking more and more like Katrina.
Even with Cantrell dying rapidly, the current output in an oil constrained world will provide sufficient capital to outsource the needed expertise if they don’t become complacent with higher oil prices which offset the lower output.
We have seen 2 legs of the oil Bull. There will be a third.
My target is now $220 by 2010. I believe that $110 will hold.
The longer oil and derivates remain at these levels, the greater the likelyhood consumers will adjust to it. And having seen $150, a move above $200 will not be as great a shock as the move to the previous level.
I still expect an Israeli strike on the Nuc facilities in Iran before Obama becomes President.
Oil and the dollar will both rise as long as the Soviet nationalistic resurgence continues.
2 JRip // Aug 28, 2008 at 5:57 am
Steady decline of 15%?
Consider these numbers for Cantarell:
July 2007: 1,526 thousand
June 2008: 1,017 thousand
July 2008: 974 thousand
So July 2008 is down…
36+% year over year
4.2% in one month
3 paultaut // Aug 28, 2008 at 7:04 am
Annualized, 15% a year over 4 years.
Accelerating downward probably because of enhanced recovery techniques, depletion faster than previously anticipated?
4 paultaut // Aug 28, 2008 at 10:42 am
Gustav, Hannah and a player from left field.
Gustav is being prepared for, Hannah could strengthen and hit Florida at the same time but there is another player, a Pacific storm which might hit the Gulf from the West if it stays intact.
5 Don // Aug 28, 2008 at 11:40 am
I fear Cantarell is an example of how many large old oil fields are going to act when they go into terminal decline. Much of the technology the last 20 years deals with getting the oil out of the ground faster, keeping flow rates higher for longer than what was possible 15 years ago. This will make the decline rates much greater than most expect. The IEA has a world wide decline rate anround 4.50%. If most of the large oil fields follow Cantarell’s decline rate we could be in trouble.
Don
6 paultaut // Aug 28, 2008 at 2:49 pm
don, the North Sea Fields are declining as are Saudi fields. Enhancing production by pressurizing fields which would have been abandoned in times past has become the norm.
7 Robert Essian // Aug 28, 2008 at 4:11 pm
Fact: Mexico oil is toast.
Fact: Flow rate will diminish (Forever)
Fact: Demand will grow (forever)
Fact: Geopolitcal activities will become common and many more disruptions.
Fact: Natural gas will be used for transportation.
Fact:Wind power will be used
Fact: Solar power will be used
Fact: Everything will be used
Fact: Obama will be so much better than Bush.
Fact: I’m not excited at all about Gustov or Hannah no matter the money made in the market…I pray all are safe and well.
8 paultaut // Aug 28, 2008 at 11:00 pm
Bob, how about a prayer then for the people in the south who may decide stupidly to ride it out because nothing has happened in the last few years.
Watch Miss Congeniality and think in terms of World Peace.
Gustav and Hannah are just nature’s friendly reminders of just who is really the Boss. It should never be ignored.
9 robert essian // Aug 29, 2008 at 2:44 am
Paul, I pray all are safe and well.
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