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U.S. slashes forecast for Mexican oil output
By Robert Campbell
Reuters
NEW YORK
Petroleumworld.com 05 25 07
U.S. government forecasters sharply reduced their projection for Mexican oil output in a report released on Monday after reassessing the willingness of the Mexican government to open up the country's oil sector to foreign investment.The Energy Information Administration said in its 2007 International Energy Outlook that Mexican oil production will decline to 3 million barrels per day by 2012 before gradually rebounding to reach 3.5 million bpd by 2030.
Mexico pumped 3.185 million bpd in April, down from the average 3.256 million bpd produced in 2006, state oil company Pemex said on Monday.The EIA had projected in its 2006 Outlook that Mexican oil production would hit 4 million bpd by 2010 and 5.1 million bpd by 2030 as resources in the deeper waters of the Gulf of Mexico were brought into production.
Falling production at Mexico's giant Cantarell oil field, one of the largest in the world, is being only partially replaced by new developments in shallow waters while deepwater exploration efforts remain in their infancy, the EIA said.
Restrictions on Pemex's exploration budget, which is set by the Mexican Congress, and continued legal and constitutional barriers to foreign participation in the Mexican energy sector are the two main factors holding up development of deepwater oil fields.
The EIA is now assuming "a considerable time lag between deepwater discoveries and when (Mexico's state oil company) Pemex will have the technology necessary to develop the fields."
Mexican president Felipe Calderon, a former energy minister, is believed to support loosening restrictions on foreign investment in the energy sector to bring in foreign capital and technology but the idea remains controversial."It is premature to be pessimistic about what the Calderon government will or will not do about energy policy," said George Baker, the Houston-based publisher of Mexico Energy Intelligence.
"I believe they have aggressive plans for the energy sector but these cannot be revealed until they get past certain milestones, including finishing contract negotiations with the oil union."
Pemex itself believes it will need to invest $33 billion a year to hold production at 3.1 million bpd by 2012, Deputy Director of Strategic Planning Guillermo Ruiz said at an energy conference in La Jolla, California, on Monday.
Mexico is currently the third-largest oil supplier to the United States, and many U.S. Gulf Coast refineries are set up to process Mexican heavy crude.Declining Mexican output means the United States will have to rely more on heavy oil supplies from Saudi Arabia, said EIA administrator Guy Caruso on Monday. (Additional reporting by Erwin Seba in La Jolla and Tom Doggett in Washington)
Reuters 05 24 07
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