Last October, I noted some serious oil disorder south of the border, particularly when it comes to the formerly famed and now fast-fading Cantarell field. Today, I'm once more urging you, my fellow oil-focused Fools, to keep an eye on Mexican production.
At the outset, this Mexican supergiant contained perhaps twice the reserves of Petrobras'
At the beginning of 2009, state oil monopoly Pemex prognosticated production of 756,000 boe/d for the year. The company's fourth-quarter financial report rounded that figure down to 700,000 per day, but a spokesperson quickly denied that this signaled a forecast reduction. As you can imagine, this is a pretty sensitive subject.
That didn't stop the International Energy Agency (IEA) from laying the smack down on Friday. In its newest Oil Market Report (for subscriber eyes only), the Paris-based think tank projects Cantarell production of roughly 600,000 boe/d. That's more than 20% below Pemex's forecast!
Is the IEA overly pessimistic, or is Pemex's outlook too optimistic? I'm afraid the latter case is more likely. Just look at the December 2008 monthly average, down 36% from the prior year. January fared even worse, off a glaring 38%.
Given these horrific stats, you'd never guess that Pemex is spending billions of dollars on Cantarell each year. That's exactly the case, however, and industrial gas firms like Praxair
Just as important for energy services investors, Pemex is intent on initiating other large projects to try and offset some of Cantarell's decline.
One key focus is Chicontepec, an onshore field into which Schlumberger
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