Earth Equity News

Oil Production Sagging in Mexico. By Clifford Kraus and Elisabeth Malkin, NYTimes, March 9, 2010. "To the Mexican people, one of the great achievements in their history was the day their president kicked out foreign oil companies in 1938. Thus, they celebrate March 18 as a civic holiday. Yet today, that 72-year-old act has put Mexico in a straitjacket, one that threatens both the welfare of the country and the oil supply of the United States. The national oil company created after the 1938 seizure, Pemex, is entering a period of turmoil. Oil production in its aging fields is sagging so rapidly that Mexico, long one of the world's top oil-exporting countries, could begin importing oil within the decade. Mexico is among the three leading foreign suppliers of oil to the United States, along with Canada and Saudi Arabia. Mexican barrels can be replaced, but at a cost. It means greater American dependence on unfriendly countries like Venezuela, unstable countries like Nigeria and Iraq, and on the oil sands of Canada...

"Mexico probably still has plenty of oil, especially beneath the deep waters of the Gulf of Mexico, but Pemex lacks the technology and know-how to get it out. Inviting foreign companies into the country to help is one of the touchiest propositions in Mexican politics. As the Mexican government struggles to find a way forward, production keeps falling. The basic problem is simply that Mexico's readily accessible oil is used up -- pretty much the same thing that happened to the United States when production began falling in the 1970s. Output from Mexico's giant Cantarell field, in shallow waters near the eastern shore, has plunged by 50% in recent years. Output at the country's other large field is expected to begin falling in the next year or two. Historically, oil has supplied 30 to 40% of the Mexican government's revenue."