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|Canales: Output will drop at Cantarell field|
Viernes 10 de febrero de 2006
Miami Herald, página 1
Petróleos Mexicanos, the nation´s oil monopoly, may face plummeting production at its largest oil field in the next several years, increasing the likelihood the nation´s exports will decline, said Energy Secretary Fernando Canales.
Canales said Pemex has done a study that shows production may decline. Pemex said Dec. 8 that Cantarell will decline 6 percent this year to 1.9 million barrels per day. Last year, Pemex exported 1.82 million barrels per day, most of it to the United States.
"Parallel to the decline of Cantarell, which is a fact, we are exploring and drilling new fields that will replace this capacity," Canales said in an interview in Houston.
The study, reported on Thursday in the Wall Street Journal, has sparked a discussion over how rapidly Cantarell, the world´s second-largest oil field, will decline and whether Pemex can increase production in other fields to make up for the drop, said John Padilla, director of IPD Latin America, an energy consulting firm with offices in Mexico City, Caracas and New York.
The study shows Pemex production in Cantarell may fall to as low as 520,000 barrels per day in 2008 from 2 million barrels a day in 2005, the Wall Street Journal reported.
Pemex forecasts production will rise to more than 3.4 million barrels a day in 2006, a 2 percent increase from last year, as drilling picks up in the company´s Ku-Maloob-Zaap field.
Pemex is running into heavier crude in that field, making it more complicated and expensive to extract, Padilla said.
"The big question is can they have that much production online from Ku-Maloob-Zaap," Padilla said. "The problem is they don´t have a plan B."
David Shields, a Mexico City-based energy consultant, published parts of the internal Pemex study in the February-March issue of his magazine Energia a Debate. The study says Cantarell production could drop to 875,000 barrels per year at the end of 2007 and 520,000 barrels per day at the end of 2008 based on a 30 percent recovery rate, according to the magazine.
Pemex´s forecast for a 6 percent decline in the field´s production this year is based on a 52 percent recovery rate, which would put Cantarell´s output at more than double the worst-case scenario at the end of 2008, Shields said.
Pemex declined to make the study available to Bloomberg.
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Canales said Pemex needs to double its investment budget to increase production and make up for the Cantarell decline. Pemex has been investing more than US$10 billion a year since President Vicente Fox took office in December 2000, more than double from previous years.
"We have invested like never before in exploration and drilling so that the rate of reserve replacement has increased from 17 percent five years ago to about 50 percent," Canales said.
Pemex has borrowed to finance much of the investment increase, doubling its debt to US$46 billion since Fox took office because the government takes 62 percent of Pemex´s revenue in taxes, leaving it with little cash.
Canales said he will continue to lobby Congress, which is now in session, to approve legislation to open the Mexican oil industry to private investment. Fox, who is barred from re-election, will step down on Dec. 1 following the July 2 presidential vote.
Pemex invested in boosting production at Cantarell by injecting nitrogen in Cantarell to increase pressure beginning in 2000, a measure that likely hastened the production decline, Padilla said.
Production from Cantarell jumped to 2 million barrels per day last year from 1.23 million barrels a day in 1999.
"They ramped up production very, very fast," Padilla said. "You can´t pump out those levels of production without shortening the life of the field.´´
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