Rate Of Production Decline At Cantarell More Than 2X Mexican Government Estimates - Bloomberg

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Jan. 20 (Bloomberg) -- Petroleos Mexicanos, Mexico’s state oil company, will probably report its fastest drop in production since 1942, eroding revenue as plunging crude prices limit the amount of cash available to drill for new reserves.

Pemex last year likely extracted 2.8 million barrels a day, down about 9 percent from the 3.08 million a day pumped in 2007, representing a total of $20 billion in lost sales, according to data compiled by the government and Bloomberg. The Mexico City- based company, which had revenue of $104 billion in 2007, plans to report annual production figures tomorrow.

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Deepwater discoveries or finds at the onshore Chicontepec field may help counter a decline at the Cantarell field, the world’s third largest. Pemex is betting it can produce about 500,000 barrels a day from Chicontepec, a series of small, connected deposits spread across Veracruz and Puebla states, by 2021. The first deepwater well is due to come on line by 2015.

By then, Cantarell may be producing less than 500,000 barrels a day of oil, Chief Executive Officer Jesus Reyes Heroles said last year. Output at the field, falling more than twice as fast as government estimates, dropped to 862,060 barrels a day in November from a year earlier, according to Mexican energy ministry data. Cantarell, struck in 1976, was the biggest oil find in the Americas until last year, when Petroleo Brasileiro, known as Petrobras, discovered the Tupi field. Pemex estimates that Cantarell had 17 billion barrels of crude oil equivalent in reserves when it was found, compared with Tupi’s 8 billion barrels. Cantarell represents about one-third of Pemex’s output today, down from 65 percent at its peak in December 2003.

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http://www.bloomberg.com/apps/news?pid=20601086&sid=aljs7Sa2UKq4&refer=latin_america