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Mexico's Pemex to Spend $6B to Maintain Output at Cantarell

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Pemex will launch a $6 billion investment in 2017 aimed at maintaining current levels of production at its once-supergiant Cantarell field over the next decade, a Pemex official says.

Reuters

MEXICO CITY, July 1 (Reuters) - Mexico's state-run oil company Pemex will launch a $6 billion investment in 2017 aimed at maintaining current levels of production at its once-supergiant Cantarell field over the next decade, a Pemex official said on Tuesday.

Discovered in 1976, output from the offshore Cantarell field once supplied over 2 million barrels per day (bpd), or more than half of Mexico's total crude production.

But output at the field has fallen more than 80 percent since 2004 to hover around 340,000 barrels per day (bpd).

The investment will counteract the natural decline of Cantarell by squeezing out an additional 100,000 bpd per year via secondary recovery over the course of a decade, said Miguel Angel Lozada, Pemex's Cantarell administrator.

Lozada said that Akal, Cantarell's most productive sub-field, will be stabilized with the plan.

"By doing this we can make sure that Akal's output will remain steady at between 180,000 and 200,000 bpd for a longer period of time," he said.

In May, crude output from Akal stood at about 189,000 bpd.

A sweeping energy reform passed late last year by Mexico's Congress ended Pemex's 75-year monopoly on crude production and paves the way for new operators into the market via potentially lucrative contracts and licenses.

While Pemex is expected to keep mature assets like Cantarell under a so-called Round Zero allocation due to conclude in September, the reform will also permit first-ever joint ventures between Pemex and oil majors in new and existing developments.

Cantarell is Mexico's second highest-yielding crude field, behind Ku Maloob Zaap, which produces about 850,000 bpd.

(Reporting by Adriana Barrera; Writing by David Alire Garcia; editing by Andrew Hay)

Copyright 2014 Thomson Reuters. Click for Restrictions.

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