Pemex production rises after pipelines repaired

Mexico's Pemex said it increased production by 41,000 b/d in June to 2.84 million b/d, a slight improvement over May but still below the company's target of 2.9 million b/d for 2008.

Jul 23rd, 2008

Eric Watkins
Senior Correspondent

LOS ANGELES, July 23 -- State-owned Petroleos Mexicanos said it increased production by 41,000 b/d in June to 2.84 million b/d, a slight improvement over May but still below the company's target of 2.9 million b/d for 2008.

Pemex said the improvements came after it repaired an offshore pipeline in the Southeast marine region. The repairs enabled an 11.5% increase in June to 535,937 b/d.

Still, June production remains 11.5% lower than the same period a year ago, when Mexico produced 3.21 million b/d.

Earlier this week, Pemex said its average daily oil production in the first 6 months of 2008 fell 9.7% from the year-ago period, producing an average of 2.86 million b/d of oil in this year's first half.

Pemex said output at Cantarell, its largest source of oil, was 1.15 million b/d, a decline of 457,000 b/d from the same period in 2007. In June, it said, Cantarell production fell by 25,849 b/d to 1.05 million b/d.

Apart from the decline at Cantarell, Pemex production also has been hurt by the need to shut in wells that have started to produce large amounts of water. The company is said to be struggling to establish water separation facilities to enable continued production at such wells.

While crude production remains below target, natural gas output in the first half of the year rose 13.3% to 6.723 bcfd. Gas production also rose to a record 7.02 bcfd in June, up from 6.85 billion in May and 6.19 billion in June 2007.

Pemex said it is producing more gas at Cantarell, where gas is moving into wells that formerly produced oil. Gas output at Cantarell rose 4.9% in June to 1.67 bcf.

Contact Eric Watkins at hippalus@yahoo.com.

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