MEXICO CITY (Dow Jones Newswires), March 13, 2009
Mexico's state oil company has an overly optimistic outlook for the giant Cantarell oil field this year, the Paris-based International Energy Agency said on Friday.
Cantarell, one of the largest oil fields ever discovered and which provided 60% of Mexican production at its peak, has declined faster than expected in recent years. This has eroded Mexico's overall crude output and exports. State-run Petroleos Mexicanos is now scrambling to find and develop new pools of oil to compensate.
The IEA, a think-tank for oil-consuming countries, predicts average production of around 600,000 barrels a day at Cantarell in 2009, compared with Pemex' target of 756,000 barrels a day, according to the IEA's monthly Oil Market Report.
Last year Cantarell output fell by one-third to an average of 1 million barrels a day, dragging down overall Mexican production by 9% to a 13-year low of 2.79 million barrels a day.
Pemex continues to shut in wells at Cantarell that produce too much natural gas or water. As the oil layer of the reservoir recedes after decades of exploitation, wells higher up start to pump natural gas, while wells lower down extract more water.
Pemex has invested in infrastructure to separate the gas and water from the oil, but it is still insufficient. Industry executives say Pemex has already had to shut down water and gas producing wells at Cantarell this year.
At Cantarell, Pemex plans to invest $3.6 billion this year, up from the $3.4 billion spent in 2008.
The 2009 investment involves 16 new wells and 14 well completions. Pemex also plans to add more water-separation equipment and build three new drilling platforms.
Pemex expects to produce an overall average of 2.75 million barrels a day this year, even though the company has fallen short of its production targets since 2004. In January crude output slipped to 2.69 million barrels a day, with Cantarell producing 772,000 barrels a day.
Copyright (c) 2009 Dow Jones & Company, Inc.
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