Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Aug. 28 -- Oil production by Mexico’s state-owned Petroleos Mexicanos (Pemex) will average 2.5 million b/d in 2010, down 4% from levels in this year’s first half and down 5.7% from previous estimates, according to Energy Secretary Georgina Kessel.
Given the decline, Kessel said it is “very important” that the energy sector supports Pemex in expanding capacity, referring to proposed legislation by President Felipe Calderon that is aimed at opening Pemex to private investment and partnerships.
Kessel’s remarks on production figures followed earlier statements by Pemex officials, who said that the decrease to 2.5 million b/d was a “preliminary estimate” by Pemex Chief Executive Officer Jesus Reyes Heroles in remarks published by Mexico’s Reforma newspaper.
They said Pemex, which has an oil production goal of 2.65 million b/d for 2009, actually saw output fall by 7.8% to 2.561 million b/d in July compared to the same month in 2008.
They said 58.1% of Pemex’s July production was heavy crude, 31.5% light crude, and the remainder super-light crude. They said 76.8% of its production came from marine regions, while 19.4% came from the southern region, and the rest from the north.
The amount of oil available for exports has been reduced by the decreased production figures as well as by increased domestic demand. Exports dropped by 14.8% to 1.2 million b/d during the first half, compared with 1.4 million b/d in first-half 2008.
Regardless of the exact figures, Pemex’s reduced output is largely due to declining production at the aging Cantarell field, which saw a 35% decrease year-on-year in the first 7 months of 2009.
According to analyst IHS Global Insight, Cantarell field reached peak production of more than 2.1 million b/d in 2004, but its output has since plummeted “precipitously” to just 588,000 b/d in July 2009.
Pemex hopes to raise its overall oil production by seeking contractors to drill 200 oil wells in the country’s southern district, with drilling slated scheduled to start in early October and last for 3 years.
On July 30, Pemex said it would keep to its target of nearly $20 billion in capital expenditures for 2009 despite the current oil price slump. In 2008, Pemex's total investments reached $18 billion, up from just $5.1 billion in 1998.
Last year’s boost in spending clearly has not stabilized production, however, and analysts remain skeptical of the company’s spending plans for 2009.
“Pemex intends to spend some $19.5 billion this year to find new fields in a bid to boost future production, but the overall output picture is likely to get worse before it gets better,” said IHS Global Insight.
Contact Eric Watkins at [email protected].
Photo from OKEA.
Rendering from Cedar LNG.
