(Huge) Mexican oilfield crucial to U.S. facing decline

[RedEarth]

MEXICO CITY - Mexico's giant Cantarell oilfield, which has financed government spending and held down U.S. gasoline prices for 20 years, is facing a production decline, a prospect that could heighten U.S. dependence on Middle East oil.

An internal report from Mexico's state-owned oil company, leaked last month, said water and gas were seeping into the massive offshore oil field in the southern Gulf of Mexico. That development would reduce Mexican oil output, which would be bad news for U.S. consumers. Mexico is the second-largest supplier of oil to the U.S. market.

.........

Cantarell is one of the world's great oil fields; only Saudi Arabia's Ghawar field is larger. It was discovered in 1976 and has been a workhorse ever since.

"It's a supergiant field, so when you have a supergiant field declining, it's very difficult to compensate for that," said Adrian Lajous, a veteran oilman and the director of state-owned Petroleos Mexicanos (Pemex) from 1995 to 1999. "Cantarell has peaked and has started its decline."

Cantarell's output of 2 million barrels per day last year accounted for about 60 percent of Mexico's output of 3.3 million barrels daily. It's been pushed hard in recent years to take advantage of high global oil prices. Cantarell's production rose from 1 million barrels per day in 1994 to a peak of 2.13 million in 2004.

http://www.realcities.com/mld/krwashington/news/nation/14116129.htm

[Systematic Chaos]

1. Uh... WHOOPSIE!!!

:eyes:

[Syncronaut Seven]

2. I'll miss the old Mexico. Looks like they may be ripe for "Democracy"

A registered trademark of neo-con Inc.

[phantom power]

3. Interesting...

They claim the Cantarell field is 2nd largest, but in THIS article, they claim the Burgan oil field in Kuwait is 2nd largest:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=46146&mesg_id=46146

Either way, it's time to bring out the brown trousers.

[madrchsod]

4. no--the Iraqi fields are larger

no--- the Venezuelan fields are larger
no--the russian fields are larger

it`s just so confusing

[Dead_Parrot]

5. Maybe it's a measurment thing...

"Largest area" vs "most oil to date" vs "highest current production" vs "largest reserves remaining"...

[phantom power]

6. Hmmm. Always room, on the Pareto surface with sufficient dimensions!

[hatrack]

7. Vs. OOIP - "Oil Originally In Place" - or something like that

I've always heard that Burgan was 2nd to Ghawar - not sure about this article.

[4dsc]

8. Much to do about nothing..

I'm afraid this is nothing more than hype for the most part. This has happen before and Mexico still doesn't have the expertise to drill in deep waters where this field is alledgely..

http://www.energybulletin.net/2028.html

For more comments on this discovery go to http://www.theoildrum.com/story/2006/3/14/174055/927#more

[NickB79]

9. A couple of things

First, the newly found replacement well is in deep water, meaning that when it is drilled, the oil will not be cheap.

Two, it states that they are unconfirmed estimates: "unconfirmed deep-sea reserves could amount to a colossal 54 billion barrels of crude oil equivalent."

I think we should all consider the debacle with the Caspian Sea reserve that was found a few years ago. Originally they were estimated at a whopping 200 billion barrels. Now they are stating that the reserves are likely less than 50 billion barrels. I would not be surprised to see the final numbers on the new Mexican reserve at only a fraction of the initial estimate.

Oh, would you look at this? It looks like it has already been cut in size as drilling commences: http://news.bbc.co.uk/2/hi/americas/4808466.stm

"Mexican President Vicente Fox has announced the discovery of a new deep-water oil field, which is believed to contain 10bn barrels of crude."

That still makes it a large field, but according to EnergyBulletin, Cantarell had 35 billion barrels of crude when discovered, and expected to only recover 50% of the oil: http://www.energybulletin.net/1651.html. This new reserve should thus only yield 5 billion barrels of oil total at that rate. It may be enough to offset Cantarell's decline, but global oil demand continues to increase. Simply holding the line is no longer sufficient to satisfy our thirst for oil.

[Dead_Parrot]

10. at $65 a barrel, it wouldn't need to be...

Nut you're right about reserves vs what we get. Which is a relief, to be honest - we may get out of our climate gang-bang sooner than we thought....

[NickB79]

11. True, at high prices the oil companies would make money

But we the consumers will be paying dearly for it. What concerns me is that the American economy is built around cheap fuel to get us to work, to the movies, to the malls, etc. If gas prices reach $5/gallon here, we will feel it throughout our economy.

[Dead_Parrot]

12. Ah, well...

...You'd have to ask Kunstler about that....