Mexico's largest oil field declining faster than predicted?

Yeah, this one has naturally showed up in a variety of places of late. What I find funny is that in this week's Newsweek, "The Last Word" by George Will blasts 'W' for being 'obsessed' with ethanol as a way to ween us off of oil from unstable regions. He goes on to point out Canada and Mexico as our largest suppliers and sarcastically notes how unstable they are. He doesn't, of course, mention that Saudi Arabia is #3 and he certainly didn't point out that Mexico's production is going in the tank fast with this somewhat unexpected result. This will probably mean that SA moves into #2 on the charts. Obviously George didn't do thorough research on that one. I wonder how many people will nail him for it in next weeks op/ed section. I'll have to look.

I'm not sure where we'll make up the 800K/yr barrel shortfall. It will probably come from many different sources. It seems to me that we're getting pretty close to peak unless a few mammoth fields are found are many, many smaller fields are put into production. It seems like we'll be lucky to keep treading water if other large fields start to decline.

The real problem here is that if things peak soon then investors will jump on CTL and the like. That's not a good thing. Given the latest trends in public opinion on GHG and climate change I would hope that efficiency and alternative techs would be favored. However, if CTL can deliver at $35/barrel I fear that people will take the short term, "keep me comfortable" approach and screw the future. On the other hand, I don't know how fast CTL production could realistically be ramped up.

 

And in other news:

http://www.bloomberg.com/apps/news?pid=new...id=aoS6HuXM_pqk

Feb. 8 (Bloomberg) -- Norway dropped to fifth place among the world's crude oil exporters last year as the nation's North Sea production declined, the Norwegian energy ministry said. The United Arab Emirates replaced Norway as the world's third-largest exporter after Saudi Arabia and Russia, Sissel Edvardsen, a spokeswoman for the ministry, said today in an interview. Iran currently holds fourth place, she said.

 

<div class='quotetop'>QUOTE(Beryl Octet @ Feb 8 2007, 10:27 PM) [snapback]387248[/snapback]</div>

I can't recall where I heard this, though I do recall it appeared a credible source at the time: Advanced drilling and recovery techniques get out more oil, faster, and as an unexpected consequence, the falloff from peak production is now more rapid. A lot of the projection of falloff is based on rules-of-thumb -- what they've seen before in similar circumstances. And the rules are therefore based on the prior generation of drilling and extraction techniques, which apparently understate the rate of decline for wells expoited with more modern techniques.

What I'm saying is that it's not a coincidence that there are now a lot of "new-oil" countries being surprised by unexpectely high rates of decline (I'd include Great Britain in the list). It's a systematic issue because the old rules of thumb for decline rates don't fit the new extraction techniques.

 

Well, in the case of Cantarell, the Mexicans shoved a lot of nitrogen down into the field to enhance the rate of production. They pretty much doubled the rate in a few years and Cantarell became the second fastest producing field in the world, behind Saudi Arabia's Ghawar Field. That seems to be the source of the rapid declines that we're seeing now.

 

The real problem with Mexico's oil fields isn't "peak" oil. There is plenty of oil in the fileds, it's the Mexican infrastructure that is not able to handle even the current load of oil. Because of Mexico's socialistic government (ie that the government controls the oil) Pemex has been the golden teet that Mexico has suckled on, but they never nurished the teet and now its running dry.

Mexico needs new infrastructure and exploration to take advantage of the oil that is there, it is not running out of oil.

 

<div class='quotetop'>QUOTE(Devil's Advocate @ Feb 9 2007, 11:29 AM) [snapback]387565[/snapback]</div>

The Cantarell field is running out. The declines are worst case scenario for that field. True, there is more oil that they have access to, but it's further offshore and more difficult to get at. By the time any of this oil is exploited much of Mexican production will have diminished. This will mean still mean that Mexico's production will have peaked.

 

I hope you're aware of the fact that oil is pretty much organic matter compressed over millions of years, and that we are burning it off in a nano-fraction of the time it took for the oil to form. Oh wait, that's something the socialist liberal scientists invented to take over the world and impinge on the humanistic rights of wholly benevolent and good-willed corporations. Anyhow if you consider Mexico socialist, then I sure as heck don't want to know about your take of other countries.

 

<div class='quotetop'>QUOTE(burritos @ Feb 11 2007, 05:31 PM) [snapback]388660[/snapback]</div>

Bah! We are better than nature. We are gods chosen so lets continue to rape indigenous peoples of North America for the 35% of oil that we currently obtain from their lands. Lets do that and then work on them damn tar sands! These people are wasting gods gift. <... Wow, that made me feel about 400 years old. lol