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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (4516)	8/2/2006 11:58:36 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 24246

Mexico's Largest Oil Field Output Falls to 4-Year Low (Update2) Aug. 1 (Bloomberg) -- Mexican crude oil output at Cantarell, the world's second-largest field, fell faster than expected in June to a four-year low, signaling the government will miss production targets. The field, which accounts for about half of Mexico's crude production, yielded 1.74 million barrels a day in June, 13 percent less than a year ago and the least since November 2001, according to Energy Ministry data. Petroleos Mexicanos, the state oil monopoly, forecast Cantarell output would fall 6 percent this year to average 1.9 million barrels per day. The drop worsens the outlook for Mexico's crude exports, about 80 percent of which go to the U.S., and for the country's public finances. Taxes on oil sales account for almost 40 percent of Mexico's government revenue. Cantarell is the world's No. 2 field by output and Mexico's biggest. ``The situation is probably much graver than the government would like us to think it is,'' said David Shields, an independent oil consultant based in Mexico City who has covered the industry for 18 years. ``Oil production and oil exports are going to decline considerably over the next three years.'' Officials at Pemex, as the oil company is known, weren't available for comment today, a company spokesman in Mexico City said. Mexico since 1979 has pumped the majority of its oil from Cantarell and reinvested little in developing other reserves, Pemex Chief Executive Luis Ramirez Corzo said in a March 30 interview. Ramirez Corzo said lawmakers must change the constitution to allow private companies to invest in Mexico to tap fields in deep water offshore and to develop a costly onshore field, helping compensate for depletion at Cantarell. Cantarell contained 35 billion barrels of oil when discovered in 1976. Drop in Exports Production at Cantarell has averaged 1.84 million barrels daily during the first six months of the year, 10 percent less than a year ago, according to Energy Ministry data. Mexico's total crude production fell 3.9 percent in the period, reaching 3.29 million barrels daily in June. Crude oil for September delivery rose 51 cents, or 0.7 percent, to close at $74.91 a barrel on the New York Mercantile Exchange. Prices are up 23 percent this year. Mexican crude oil exports fell 1.1 percent in June to 1.78 million barrels a day, according to the Energy Ministry. Sales abroad of crude are still up 4 percent for the first half of the year. Exports may decline to as few as 800,000 barrels daily two years from now should Cantarell output declines continue to quicken, Shields said. Chief Financial Officer Juan Jose Suarez Coppel will hold a conference call tomorrow to discuss second-quarter earnings. Pemex hasn't published second-quarter output by fields on its web site. To contact the reporter on this story: Adriana Arai in Mexico City at aarai1@bloomberg.net bloomberg.com