Cantarell Output May Fall 6% In 2006 - Water Cut Rising Fast - Forbes

[hatrack]

LONDON (AFX) - Mexico's huge state-owned oil company, Petroleos Mexicanos, or Pemex, may be facing a steep decline in output that would further tighten global oil supply and add to global woes over high oil prices, the online edition of the Wall Street Journal reported.

The potential decline faced by Pemex, also could undermine US efforts to reduce dependence on Middle East oil, and complicate Mexican politics and financial stability.

An internal study reviewed by The Wall Street Journal shows water and gas are encroaching more quickly than expected in Cantarell, Mexico's biggest oil field, and might cause output to drop precipitously over the next few years.

EDIT

Pemex predicts Mexico's output will actually grow this year to 3.42 mln barrels a day from 3.33 mln barrels last year. But the study already prompted the company in December to predict a slightly sharper decline at Cantarell than its previous forecasts -- with output down 6 pct this year to an average rate of 1.9 mln barrels a day and off to 1.43 mln barrels as an average for 2008. That prediction now roughly matches the study's most optimistic scenario.

EDIT/END

http://www.forbes.com/home/feeds/afx/2006/02/09/afx2512329.html

[hatrack]

1. Hello? Self-kick nt

.

[phantom power]

3. I was sort of at a loss for words...

Except for the usual three: "we are fucked."

[4dsc]

2. Check out what's missing

I found this article that somewhat matches your article with one small exception.. I wonder why your article failed to mention this??

The worst two scenarios suggest a drastic decline in output to 875,000 barrels a day by the end of 2007 and to just 520,000 a day by the end of 2008. If such projections turn out to be correct, Mexico's overall oil exports would decline by about one million barrels a day -- equal to about 63% of its daily crude exports to the U.S. -- from its current 1.8 million.

http://www.energybulletin.net/12764.html

[hatrack]

4. Good question - does Forbes generally not do worst-case scenarios?

But if the water cut is really high, the fall-off could be really rapid.