I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Mon Apr 18, 2005 4:23 pm Post subject: Mexico: Pemex and Cantarell News And Discussion Thread
It seems that Pemex has come to terms with the inevitable. From their latest reserve report comes this ominous quote.
Quote:
Cantarell
A strict monitoring and management reserves program is followed in each of Cantarell’s wells. This monitoring allows PEMEX to estimate its production levels, which is estimated to start declining by the end of this year.
According to their operating statistics on the Cantarell region, the end of this year might even prove to be too optimistic.
Code:
production
2,756 March 2003
2,729 April
2,759 May
2,840 June
2,845 July
2,868 August
2,867 September
2,849 October
2,833 November
2,904 December
2,865 January 2004
2,804 February
2,817 March
2,890 April
2,840 May
2,883 June
2,804 July
2,797 August
2,874 September
2,893 October
2,809 November
2,675 December
2,793 January 2005
2,786 February
2,693 March
Joined: Aug 14, 2004 Posts: 2068 Location: San Diego, Ca.
Posted: Mon Apr 18, 2005 9:27 pm Post subject:
Will the new production coming online make up for Mexico's decline?
I read one article a while back that stated Mexico will be a net importer of oil by 2012! _________________ "Peak oil isn't more than an interesting industry factoid and doesn't have anything to do with the hysterics speculated on ad nauseum around here!" ReserveGrowthRulz
Mexico's problem is that the government has a 60% tax on their oil monopoly and a law that bans foreign oil companies from investing in their fields. They lack the ability to invest seriously in their Gulf of Mexico deep water oil fields. They also lack the technology available from the USA.
Mexico could likely plateau for much longer if they allowed foreign oil companies it invest and earn a worthwhile rate of return.
Mexico could likely plateau for much longer if they allowed foreign oil companies it invest and earn a worthwhile rate of return.
They could ramp up production to a higher level with foreign investment. The amount of oil they have is a fixed number. If the difficult oil isn't extracted today, it will be in the future. Thus, if they increase production rates now, there will be less in the ground at any given future date.
Right now they are producing enough oil that there aren't gas lines at Pemex stations in Mexico, and selling enough oil that the Mexican people are mostly not starving.
They are taxing the hell out of Pemex to keep the government functions going (some investment in the country, some graft I know..).
You're of the opinion that the Mexican government should allow this money to flow out of Mexico, into ExxonMobil and Citibank investors, so they can pump the oil they have faster than they need to pump it for survival, so gas prices can come down in the US?
If I were a Mexican leader, honestly concerned about the Mexican people first over the long haul, I'd be doing exactly what they're doing. When Cantarell and friends are so depleted that the Mexican people were in a bind (and this will be in the next 5-7 years), then I'd open up to foreign companies (who should be damn desperate for new oil projects by this point), and tax the hell out of them.
No there are currently three refineries affected by outages.
But it wouldn't surprise me if we see a drop in imports soon. Mexico is one of the biggest suppliers to the US. According to the iea they have been compensating for the production loss at Cantarell by selling from stocks. This cannot go on indefinitely
Quote:
Mexico – December actual: Crude production fell by 140 kb/d in December to average 3.22 mb/d, the lowest level since late-2002. This unscheduled drop is assumed to have been due to a temporary outage affecting the Cantarell field, source of the bulk of Mexico’s heavy Maya crude which took the bulk of December’s fall. However, exports remained unaffected by the fall in production, rising 25 kb/d to 1.98 mb/d, as sales out of storage rose to compensate.
I doubt it. Grades of oil are separated out before they get to the refinery. It would take a LOT of mistakes in order for a refinery to put the wrong kind of crude in. Refinery shutdown have occurred in the past and its really not that unusual. It is just noticed more with supplies so tight.
Joined: Dec 09, 2004 Posts: 493 Location: Around somewhere
Posted: Thu May 19, 2005 3:22 pm Post subject:
One of their crude oil pump stations burned down recently. I'm not sure if it was pumping out of the Canterell field. Pemex is hard on equipment, to say the least.
I was designing the electrical/control systems for a new pipeline project for Pemex in the Villahermosa area. The pipeline capacity is 1.2 million BPD. That project has been put on hold, due to "lack of project definition".
It may have something to do with Pemex recently downgrading the proven reserves in some deepwater field. Not sure on that one though.
I'm also somewhat involved in redesigning the Pemex pump station that burned down. It won't be commissioned until late this year. I've heard there are other pump stations that have "issues".
I just finished a gas compression project for a platform in the north sea. The piping and valve arrangement had me curious. They have it so the wellhead can be routed directly to the station discharge or it can be switched to flow through any compression stage. When I first looked at the drawing, I asked why, and the guy said that as the well depletes, they will need to add compression to it. That's probably not an uncommon setup, but it made me think to ask this guy what the north sea situation is like. He made it sound like the whole place was pretty old and depleted.
Pemex sources have again suggested the imminent onset of decline at the Cantarell oilfield which accounts for 65% of Mexican crude output. New field development projects intended to replace this decline are believed unlikely to contribute before 2006. With decline in production evident since mid-2004, even allowing for some recovery from low March levels, Mexican supply has been revised down for 2005. Crude output is now seen declining by 30 kb/d to 3.35 mb/d this year while NGL supply is held flat at 440 kb/d.
State oil company Pemex has conceded that baseload Cantarell production is now in decline . With new field start-ups several months away at least, and potentially insufficient in scale to fully counteract Cantarell slippage, there is scant hope of increasing supply in 2005.
And for a bit of history. This is what the EIA world energy outlook said in 2002.
Quote:
Mexican crude oil production is projected to peak at 4.1 mb/d around 2010. Production will remain flat for about a decade, and then decline sharply, reaching 2.7 mb/d in 2030. New discoveries will not compensate for the decline in production from the large mature fields, such as Cantarell. Net exports of crude oil and products are expected to decline even more quickly than production, as domestic demand will continue to grow. By the third decade of the Outlook period, Mexico will become a net
importer of crude oil (Figure 4.14).
They were predicting an output close to 4 mbd in 2020 while the output in all likelyhood will not exeed the 2.9 mbd which was reached in 2003 (at least not by much). Even one year before the onset of the peak they were off by at a decade.
They couldn't see a car approaching, standing on the M3 during rush hour.
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