Free Republic

VENUSTIANO CARRANZA, Mexico — To the Mexican people, one of the great achievements in their history was the day their president kicked out foreign oil companies in 1938. Thus, they celebrate March 18 as a civic holiday. Yet today, that 72-year-old act has put Mexico in a straitjacket, one that threatens both the welfare of the country and the oil supply of the United States. The national oil company created after the 1938 seizure, Pemex, is entering a period of turmoil. Oil production in its aging fields is sagging so rapidly that Mexico, long one of the world’s top oil-exporting...

Budget Shortfall Is Likely to Worsen; Major Field Plunges MEXICO CITY -- Mexico's oil output is falling faster than expected, increasing the chance that the country will lose its status as a major oil exporter in coming years and face a worsening budget shortfall. Output at state-owned oil monopoly Petróleos 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...

MEXICO CITY — Mexican President Felipe Calderon replaced his point man in the drug war Monday, accepting the resignation of the attorney general whose image was tarnished by charges that his top confidant was on the take. The departure of Attorney General Eduardo Medina-Mora constituted the biggest shakeup in Calderon's offensive against organized crime. The president said it signified the second phase of his six-year presidency, which will reach its halfway mark in December. Calderon said the changes did not signal a relaxation in the government's assault on vicious drug cartels. But the president's all-out war has drawn criticism as...

MEXICO CITY — Mexico vowed to keep looking for a mysterious island that could extend its offshore oil claims after university researchers said they couldn't find it. "The island doesn't exist" in the area where it was shown on maps, a National Autonomous University of Mexico study concluded after conducting studies with underwater sensing devices and aerial reconnaissance in the area. "Isla Bermeja" appeared on maps from the 1700s as a speck of land off the northwest coast of the Yucatan peninsula. A group of Mexican legislators hoped the island would help their decade-long effort to fend off what they...

Mexico's state-run oil giant Petroleos Mexicanos (Pemex) on Tuesday reported that its first quarter oil output was averaged at 2.667 million barrels per day (bpd), down 7.8 percent from the same period of 2008. Cantarell, Mexico's largest oil producing field for decades, produced 787,000 bpd of oil, down more than 34 percent year-on-year. The deposit has averaged between 40 percent and 60 percent of the nation's total oil output at least over the past 20 years. The oil output at Ku-Maloob-Zaap, now the nation's biggest oil producing field, averaged 797,000 bpd, up nearly 20 percent from a year earlier. The...

MEXICO CITY – Police in northern Mexico caught a gang that allegedly stole oil from state-owned pipelines and smuggled it across the border to sell it to U.S. refineries, authorities said Tuesday.

State-owned Petroleos Mexicanos has awarded bids totaling some $5.39 billion thus far in 2009, the company said in a statement. The most recent contract, worth close to $687 million, is for drilling and completing 500 oil wells in the complex, onshore Chicontepec Field, which covers a 3,800-square-kilometer (1,470-square-mile) area in the east-central Mexican states of Puebla, Veracruz and Hidalgo. Pemex is hopeful that output at Chicontepec can eventually total between 600,000 and 700,000 barrels per day by 2017, but technically challenging horizontal drilling techniques must be employed at thousands of wells to get at the oil, which is found in...

Mexico has proved oil reserves for the coming 9.9 years and potential reserves for 19.9 years, Mexican state-owned oil company Petroleos Mexicanos (Pemex) said on Friday. Pemex said the reserves total 43.562 billion barrels of equivalent crude. Among them 14.307 billion barrels are proved, 14.516 billion are probable and 14.737 billion possible. The reserves assure 30 years of oil production in Mexico. The statistics were based on such indexes as the evolution of its reserves, oil exploitation and the total production in the previous year, Pemex said in a document entitled "The Hydrocarbon Reserves of Mexico. Evaluation to January 1,...

In 2008, Mexico was the seventh-largest oil producer in the world, and the third-largest in the Western Hemisphere. State-owned Petroleos Mexicanos (Pemex) holds a monopoly on oil production in the country and is one of the largest oil companies in the world. However, oil production in the country has begun to decrease, as production at the giant Cantarell field declines. The oil sector is a crucial component of Mexico's economy: while its relative importance to the general Mexican economy has declined, the oil sector still generates over 15 percent of the country's export earnings. More importantly, the government relies upon...

According to a report by Reuters, Pemex has lowered its production estimate for its aging Cantarell oil field, which is set to produce an average of 700,000 barrels per day (bpd) of crude in 2009. The average output rate is down from the previously announced estimate of 756,000 bpd presented by Pemex to Mexico's Congress in January. Additionally, Reuters noted that Pemex has also trimmed its forecast for Cantarell's long-term output, which the company sees averaging 400,000 bpd between 2009 and 2017. Pemex originally estimated in its January presentation that output at Cantarell would reach 423,000 bpd. Pemex has announced...

Mexican state oil monopoly Petroleos Mexicanos produced an average of 2.68 million barrels of crude oil per day in January, down 9.2 percent from the same month last year. Pemex announced its January results on Friday, noting that for the first time the Ku Maloob Zaap heavy oil field in the Gulf of Mexico became the country's most productive oil field with an average output of 787,000 bpd. It took over that position from Cantarell, which had been the most productive field since 1979 but continued its rapid decline, falling 38 percent to 772,000 bpd. Natural gas production, meanwhile, climbed...

Mexico's Petroleos Mexicanos (Pemex), eyeing continued depletion at its main oil field, said the country's oil production declined by 9.2% in 2008 to just under 2.8 million b/d. The country's level of production was the lowest since 1995, when it reached 2.62 million b/d, according to statistics from the energy ministry. Pemex explained the decrease as due largely to continuing depletion of the country's Cantarell oil field and to Hurricane Ike, which disrupted production at offshore platforms in the Gulf of Mexico. Pemex said the gradual depletion of Cantarell, where production dropped by 461,000 b/d to around 1 million b/d...

Mexico expects to hold talks with the incoming Obama administration concerning the "fair" development of oil fields that sit on both sides of the maritime border, Energy Minister Georgina Kessel said Wednesday. "We expect that, as soon as officials from the new administration are in office, these conversations will advance," Kessel told lawmakers at a hearing. She said Mexico has presented a formal proposal to negotiate "efficient and fair development of these types of reservoirs." State-run Petroleos Mexicanos thinks at least two deepwater oil fields stretch from the U.S. into Mexico. ... If production starts in the U.S. first, oil...

The Mexican government has unveiled emergency measures to protect its economy from the global financial crisis and US recession. President Felipe Calderon said Mexico was facing a period of great difficulty and rising unemployment. He promised nearly $150m (£100m) to struggling industries in a bid to save hundreds of thousands of jobs. The measure is part of a 25-point plan that includes freezing petrol prices and increasing unemployment benefits. Mexico sends 80% of its exports to the US and also depends heavily on remittances from Mexican workers in the US so has been hit by the downturn in its neighbour's...

Oil firms from offshore Louisiana to Middle Eastern deserts are cutting back during the price collapse, but oil-hungry Mexico is spending as if the boom is just starting. In Mexico, oil exports will run out in less than seven years at current decline rates, and the urgency to reverse the sharp fall has created a flurry of activity in Mexico's oil patch. If Mexico manages to buck the low-investment trend hitting the global oil industry, output will stabilize or at least fall at a slower rate over the next few years. This would guarantee fiscal revenue at home and a...

MEXICO CITY (AP) -- Mexico said Wednesday that rising domestic consumption will cut the country's oil exports almost 40 percent by 2017, although the country hopes to increase crude production to just over 3 million barrels per day by that time.

MEXICO CITY (AP) — America's third-largest oil supplier has exported 17 percent less crude this year.Mexico's state-owned Petroleos Mexicanos company says daily production through October averaged 2.8 million barrels, down nearly 10 percent from the same period last year.  Pemex says production has dropped by a third this year at Mexico's main Cantarell oil field.  An energy reform package approved by Mexico's Congress last month aims to reverse declining production by giving Pemex more leeway to hire private companies and devote more revenue to explore for oil.

NEW YORK -- Mexico, the world's sixth-largest oil producer, hedged almost all of next year's oil exports at prices ranging from $70 to $100 at a cost of about $1.5 billion through derivatives contracts, the Financial Times reported on its front page Tuesday, citing bankers familiar with the deal.

The worldwide economic slump is causing more Mexicans to consider allowing private investment in Mexico’s state-owned oil company, Arturo Sarukhan, Mexico’s ambassador to the U.S., said Tuesday. “I think that we do see the beginnings of a thaw in the way Mexicans of different political persuasions understand how reforming the energy sector in Mexico is going to be critical, not only in terms of what has happened these past two months in the world economy, but our ability to continue growing,” said Sarukhan, during a visit with the Houston Chronicle’s editorial board. “I think that the global slowdown has forced...

Mexico's energy reform just got a shot in the arm. The financial crisis and tanking oil prices puts a premium on private capital to help shore up the struggling industry, dampening a nationalist backlash. But oil firms are unsure if the reform, which was watered down earlier this year following heavy attacks from left-wing politicians, will offer enough to deploy capital south of the U.S. border. The risks are high for both Mexico and the U.S. Mexico will be importing crude within seven years unless it finds and develops new pools of oil fast. This would undermine state revenue and...