Mexico's oil output continues to recede

State-owned Petroleos Mexicanos said the country's production and exports of crude oil fell sharply in first-quarter 2008 as output continues to recede at Cantarell, the country's main oil field.

Eric Watkins
Senior Correspondent

LA JOLLA, CALIF., May 23 -- State-owned Petroleos Mexicanos said the country's production and exports of crude oil fell sharply in first-quarter 2008 as output continues to recede at Cantarell, the country's main oil field.

Pemex said average daily oil production decreased by 9% to 2.875 million b/d over the 3.164 million b/d produced in 2007, while exports fell 13% to 1.484 million b/d and imports of gasoline rose by 18% to 317,000 b/d.

The country's six refineries produced 1,520,000 b/d of petroleum products such as gasoline, diesel, fuel oil, and others.

Pemex said production of nonassociated gas increased 3% over the same period last year to 2.643 bcfd, as a result of higher volumes provided by the North.

Cantarell production has fallen by 416,000 b/d from 2007. It produced 1.15 million b/d in March, down 5.7% from February, the seventh straight month of waning production at the field.

Oil decline at Cantarell was partially offset by a 40% increase in the production of Ku-Maloob Zaap to 670,000 b/d from 476,000 b/d.

The results are not up to the expectations of Pemex officials, with falls at Cantarell and other fields greater than anticipated. In April, Pemex E&P Director Carlos Morales Gil predicted that 2008 output at Cantarell would be 1.2-1.3 million b/d, compared with an average of 1.5 million b/d in 2007.

Morales said that Pemex nonetheless would deliver the same volume of oil production in 2008 as in 2007 because other fields would compensate for the decline at Cantarell.

So far, however, Pemex has been unable to do that, and the country has had to increase its imports of oil products such as gasoline. In March, Mexico's gasoline imports rose to 360,700 b/d, the highest level since November 2007, largely due to the declining output from traditional fields (OGJ, May 5, 2008, p. 40).

Analyst BMI has forecast Mexican production as averaging 3.45mn b/d in 2008, falling to 3.15mn b/d by 2012.

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