Mexico's Natural Gas Output Reaches 6B Cubic Feet per Day

MEXICO CITY May 08, 2007 (Dow Jones Newswires)

Natural gas production at Mexican state oil monopoly Petroleos Mexicanos, or Pemex, reached 6 billion cubic feet a day at the end of March, a company official said Tuesday.

Pemex Chief Financial Officer Esteban Levin said in a conference call to discuss the company's first-quarter results that the increase was led by gains in production of non-associated gas, or gas not found in crude oil deposits.

Pemex produced 5.816 billion cubic feet a day of natural gas in the first quarter of 2007, up 14% from the year-ago period and 251 million cubic feet a day more than in the fourth quarter of 2006.

Vinicio Suro, head of planning at the company's exploration and production unit, said that of the increase in the quarter, 146 million cubic feet a day was in non-associated gas, and 105 million in associated gas.

Pemex's crude oil production in the first quarter was 3.16 million barrels a day, down 6% from the year-ago quarter, largely as a result of the decline in output from the giant offshore Cantarell oilfield.

Suro said crude production at Ku-Maloob-Zaap, one of the main projects aimed at compensating losses at Cantarell, reached nearly 500,000 barrels a day in the first quarter, and is expected to reach 600,000 barrels a day at the end of the year.

Average production from Ku-Maloob-Zaap this year is expected to be 500,000 barrels a day, Suro said, adding that the company is about to begin injecting 300 million cubic feet a day of nitrogen into the deposits to increase the pressure.

A nitrogen injection project begun in 1997 helped Pemex to double output at Cantarell to more than 2.1 million barrels a day in 2004, although output has since declined and the oilfield produced 1.6 million barrels a day in March.

Despite record production, Mexico remains a net importer of gas. Pemex also exports about 1.7 million barrels a day of crude oil.

Copyright (c) 2007 Dow Jones & Company, Inc.