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2009 September 20 Sunday
Production In Mexico's Biggest Oil Field Tanking

The tanking production of Mexico's formerly largest oil field is happening so fast it is breathtaking.

Output at state-owned oil monopoly Petroleos Mexicanos's offshore field Cantarell, once the world's second-largest oil field, has plunged to 500,000 barrels a day from its peak of 2.1 million in 2005.

"I don't recall seeing anything in the industry as dramatic as Cantarell," says Mark Thurber, assistant director for research at the Program on Energy and Sustainable Development at Stanford University.

If this happens to Saudi Arabia's Ghawar oil field then we'll enter an economic depression. As more countries hit their production peaks we become more dependent on the dwindling list remaining producers that are not yet in decline. I expect a series of oil price shocks as a result.

Mexico was America's 2nd biggest supplier in 2007 and will likely cease to supply us any oil within 5 years.

In 2007, Mexico was our second-biggest oil supplier, after Canada. Last year, with a 15% drop in daily barrels supplied, the country dropped to third place behind Saudi Arabia.

Both Saudi Arabia and Mexico are too secretive about the state of their oil fields to allow outside experts to estimate future production trends. Mexico is easier to call though since experts see deep offshore drilling as needed to slow Mexico's oil production decline. Since Mexico's government is spending Pemex revenue on government funding Pemex does not have enough money (or expertise) to do the needed deep offshore exploration and development. So we can count on continued Mexican oil production decline.

Mexico's Chicontepec field has been a disappointment. This decline in Mexican production is going to bring an end to Mexico's role as an oil exporter and therefore reduce funding for their government and depress the Mexican economy. Mexico might even become a net exporter in 5 years time. The United States needs to build a formidable physical border barrier to insulate ourselves from the economic troubles building up south of the border.

Share |      By Randall Parker at 2009 September 20 01:14 PM  Economics Energy


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Comments
Engineer-Poet said at September 20, 2009 3:26 PM:

You really need to borrow the graphic from this post at TOD to make your point.

Greasy said at September 20, 2009 6:39 PM:

How much of this decline in production is due to actually depleting the oil fields vs. incompetence/bad maintenance, etc... of the facilities?

Engineer-Poet said at September 21, 2009 9:28 AM:

The decline is due to exhaustion.  Cantarell had its flagging production pumped up with nitrogen injection.  Nitrogen maintained the pressure in the field and pushed oil down away from the expanding gas cap, rather than allowing water to flow up (I'm not sure if Cantarell had any water drive in the first place).  But accelerated production means accelerated depletion; as nitrogen reaches the production wells, you have to shut them down.


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