PEMEX Board Member - Company "Too Optimistic" About Chincotepec Field - Bloomberg

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May 22 (Bloomberg) -- Petroleos Mexicanos, the state-owned oil company, should reconsider its $11.1 billion plan for the Chicontepec field because lower oil prices make the investment less attractive, said newly appointed board member Fluvio Ruiz. “Pemex is being too optimistic about Chicontepec,” Ruiz said in an interview yesterday in Mexico City. “The Chicontepec recovery may not be too big, either in value or even production. The current price conditions may be a bit too onerous.”

Chincontepec will produce as much as 700,000 barrels a day in 10 years’ time under Pemex’s plan for the onshore field, from the current 35,000 barrels. That will help replace declining production at Cantarell, the world’s largest offshore field, where output dropped 38 percent this year through April.

Pemex plans to spend $61 billion in the next three years on Chicontepec and other new fields to maintain oil output after last year’s 9.2 percent drop, the largest since World War II. Latin America’s second-largest economy gets 40 percent of government revenue from Pemex and is the third-largest foreign supplier of oil to the U.S. after Canada and Saudi Arabia.

Ruiz, 42, joined the board on May 14 to serve for a three- year-period. Ruiz and three other new members were added to the board of Pemex as the first members outside of its union or Mexico’s government after new energy legislation came into force last year.

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http://www.bloomberg.com/apps/news?pid=20601207&sid=a2rPP0ZMmO3w