Mexican oil analyst, David Shields, expects the field's output to drop another 600,000 barrels a day by the end of this year. He says that Pemex will likely increase output by 200,000 barrels a day at other fields -- leaving the country with a net decline of 400,000 barrels a day by year's end
The sudden crash of production from Cantarell has serious implications for the US and Mexican economies. Mexico derives 37 percent of its federal budget from PEMEX's profits. Last year, revenue from the nation's crude exports reached an all-time high of $34.7 billion. In 2005 Mexico exported 1.82 million b/d mostly to the US. By last month exports had fallen to 1.53 million b/d and will obviously continue to drop during 2007 and beyond as production drops and the growing Mexican economy continues to demand more fuel.
Mexico has already warned US crude importers that it will be unable to fulfill some existing contracts. US imports from Mexico could drop by over a million barrels a day between 2005 and the end of next year. A loss of this magnitude will be very difficult and probably expensive to make up through purchases on the international market.
from Peak Oil Review
Vol.2 No. 5
January 29, 2007
Tom Whipple, Editor