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Bloomberg - PEMEX June Output Down 11% YOY - Cantarell Down 35% YOY As New Wells Fail To Keep Pace

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hatrack Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-22-08 08:44 AM
Original message
Bloomberg - PEMEX June Output Down 11% YOY - Cantarell Down 35% YOY As New Wells Fail To Keep Pace
July 21 (Bloomberg) -- Petroleos Mexicanos, the state-owned energy company, said oil output fell 11 percent in June from a year earlier as new wells failed to keep pace with a four-year decline in the aging Cantarell field, the nation's largest.

Production dropped to 2.839 million barrels a day in June from 3.206 million a year earlier, the Mexico City-based company, known as Pemex, said today on its Web site.

At Cantarell, where a drop in pressure is making it more difficult and costly to extract oil, the company pumped 1.017 million barrels a day, down 35 percent from a year earlier and the fastest rate of decline in 12 years, Pemex said. The company is pumping 33 percent more from the Ku-Maloob-Zaap field to make up for the decline at Cantarell.

A four-year drop in production and reserves put pressure on Pemex to spend more on exploration at a time when oil prices are the highest ever. The company estimates the drop in output costs about $20 billion in lost revenue annually, and President Felipe Calderon has proposed reforms that seek to give Pemex more freedom to manage the state's resources and choose projects.

EDIT

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLLrhZOGOD_M&refer=home
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-22-08 08:46 AM
Response to Original message
1. All you peak oil doubters...
what do you say to this?
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hatrack Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-22-08 08:54 AM
Response to Reply #1
3. Oil Shale! Bakken Formation! Tar Sands! Ethanol! Bigger Than Saudi Arabia! New Technology!
Edited on Tue Jul-22-08 09:25 AM by hatrack
Seismic Imaging! Slant Drilling! Corn Stover! Fischer-Tropf! Fusion! ANWR! Outer Continental Shelf! Polar Oil & Gas! Coal-bed Methane! Energy Independence! Angola! Nigeria! Kazhakstan! Kashagan! Shaybah! Free Markets! American Way Of Life! Chevy Volt! LTGOM! Jack 2! Thunderhorse! Tupi! Mountaintop Removal! LNG! Pipelines! Drill Bits! Platforms! Hard Hats! Lug Wrenches! Work Boots! Helicopters! lchqo<8fy054v**#%$H['Q98q . . . [br />
But I digress.
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-22-08 08:59 AM
Response to Reply #3
4. I think its ironic that we want to spend our money eeking out every last bit of oil
when we could use it to convert to renewable energy.
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Bigmack Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-22-08 11:19 AM
Response to Reply #4
6. There you go again...
implying that REASON should actually PERSUADE.... Ah well, hope springs eternal, I guess.... Ms Bigmack
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phantom power Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-22-08 10:10 AM
Response to Reply #3
5. OFHWAD!
:rofl:
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GliderGuider Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-22-08 08:50 AM
Response to Original message
2. Jesus. They're dropping like a rock.
I really hope this doesn't portend similar decline rates for other major producers. It wouldn't take many large provinces declining at 11% to push global post-peak decline rates past 5%/year

The thing that worries me most is that this may be a direct result of using EOR techniques that sweep the oil out of a field very rapidly, and then result in post-peak output crashes like we've seen at Cantarell and Yibal.
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Nihil Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 03:38 AM
Response to Original message
7. K & R for the pending "Oops" from the economists ...
... and other cornucopians ...
:-(
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hogwyld Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:50 AM
Response to Original message
8. All I can say is YIKES!
Anyone think this is going to affect migration patterns when the Mexican economy collapses?
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GliderGuider Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 11:03 AM
Response to Reply #8
9. Here's an article I wrote a while ago on the topic:
Mexico: Peak Oil in Action

An excerpt:

The American Response

The fact that the United States has put in place a number of detention camps across the Southern and Central United States seems to indicate that the administration is aware of an impending immigration crisis. What is significant and instructive, as well as worrying, is the nature of the official response to this insight. The camps that have been contracted are explicitly characterized as detention camps, not as refugee camps.

The official attitude underlying this approach is an illustration of the growing tendency to criminalize and militarize social problems in the United States. The current administration's prevailing ethos of control, punishment and retribution pervades such programs as "The War on Drugs", 'The War On Terror" and "The War on Poverty" (which is characterized by many on the target side as a "War on the Poor"). To this can now be added "The War on Immigration" which, while as yet undeclared, is in full swing along the Mexican border, under the auspices of the DHS and INS.

Countries like the Philippines, Chad and Pakistan have hosted large refugee processing centers under the direction of UNHCR. The mandate of such camps is protective: to safeguard the rights and well-being of refugees and provide physical care for them. By contrast, the purpose of the detention camps established in the United States is primarily one of movement control and the segregation of refugees from the indigenous population.

The fact that this is widely perceived as appropriate by American citizens is yet another illustration of the shifting tenor of American public discourse since 2001: a shift away from the values of inclusivity, generosity and freedom to those of exclusion, parsimony and control. A return swing of that pendulum would be most welcome but does not, unfortunately, seem imminent.

The Spectre of Revolution

When contemplating Mexico's future you should always remember her past. Mexican history is full of revolutionary episodes: the War of Independence of 1810; the Mexican Civil War or War of Reform of 1857; the Mexican Revolution of 1910; the Zapatista actions in Chiapas in 1994; and the recent violent confrontations in Oaxaca.

The effect of NAFTA on the lives of the Mexican poor has been devastating. In an echo of the enclosure movement in Britain many have been forced off land they traditionally occupied, either by economic circumstances or legislation. A good overview of Mexican agrarian history, including the impact of NAFTA, is available in this FAO document.

The 100+ year-old push-pull effect of the US economy on Mexican migration is a very well documented historical phenomenon. This time, circumstances are somewhat different. Many Mexican campesinos — subsistence farmers that either owned their own land or held it jointly in a collective called an ejido — were forced off their land due to NAFTA rules that allowed the dumping of highly subsidized, below market-priced US corn on the Mexican market. The land is still there, but now sits idle. In the event of a severe economic downturn there would likely be a large movement to return to the land as well as increased northward migration.

Cantarell's crash and PEMEX's impending bankruptcy present a political crisis of the first magnitude for Mexico's elite and threaten the stability of the small middle class. This crisis presents a great opportunity for the long downtrodden majority to gain power as has happened in Bolivia, Ecuador and Venezuela. Conditions will be ripe for a resurgence of revolutionary sentiment in Mexico, which will probably take the form of an import of the Bolivarian Revolution championed by Hugo Chavez.

Of course, having such an incendiary political movement on their very doorstep will not sit well with the American industrial/political establishment. The probability of direct American political, economic and even military involvement in Mexican affairs as a result should not be lightly dismissed.


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