Mexico - Cantarell crashing

Post by **mikepepler** » 01 Feb 2007, 11:48

From the ODAC newsletter:

1a/ Mexico - Cantarell crashing (Peak Oil Review [ASPO-USA], Mon 29 Jan)

No link, from ASPO-USA?s weekly Peak Oil Review newsletter.

This story was reported in yesterday?s newsletter, but POR does an excellent job of summing the info available/consequences:

<<On Friday PEMEX made it official. Production from Mexico's largest oilfield, Cantarell, fell from 1.99 million b/d in January 2006 to 1.44 million b/d in December. The company's overall crude production in December was 2.98 million b/d, falling below 3 million barrels for the first time in six years. Nearly a year ago, a leaked internal PEMEX study forecast that under the best-case scenario Cantarell's production would fall to 1.54 million barrels a day by the end of 2006 -- almost exactly what happened.

Mexican oil analyst, David Shields, expects the field's output to drop another 600,000 barrels a day by the end of this year. He says that Pemex will likely increase output by 200,000 barrels a day at other fields -- leaving the country with a net decline of 400,000 barrels a day by year's end.

The sudden crash of production from Cantarell has serious implications for the US and Mexican economies. Mexico derives 37 percent of its federal budget from PEMEX's profits. Last year, revenue from the nation's crude exports reached an all-time high of $34.7 billion. In 2005 Mexico exported 1.82 million b/d mostly to the US. By last month exports had fallen to 1.53 million b/d and will obviously continue to drop during 2007 and beyond as production drops and the growing Mexican economy continues to demand more fuel.

Mexico has already warned US crude importers that it will be unable to fulfill some existing contracts. US imports from Mexico could drop by over a million barrels a day between 2005 and the end of next year. A loss of this magnitude will be very difficult and probably expensive to make up through purchases on the international market.>>

1b/ OIL-MEXICO: Severe Withdrawal Symptoms Ahead (IPS, Thu 25 Jan)

http://www.ipsnews.net/news.asp?idnews=36306

<<Mexico is as addicted to oil as heroin addicts are to their next fix: the country depends on oil for a large proportion of its energy needs, consumes it at an unsustainable rate and goes into debt to obtain it. Unless it changes its behaviour or finds a therapy that works, the prognosis is that it will experience a serious crisis.

The problem is enormous, analysts told IPS. Mexico produces 3.3 million barrels per day (bpd) of crude, making it the sixth world producer; it exports 1.8 million bpd, and owns one of the 10 largest oil companies, the state monopoly Petr?leos Mexicanos (PEMEX) -- but it is teetering on the edge of an abyss, they said.

Local oil reserves are expected to last only nine years and eight months at current rates of production, according to precise calculations by experts, whereas in 2000 they were forecast to last 20 years and seven months. Besides, PEMEX is bankrupt.

PEMEX has debts greater than its total assets, is undertaking very little exploration, its extraction costs are rising steadily, and most of its revenues go straight into the state coffers to finance 36.1 percent of the national budget, twice the proportion that it contributed 20 years ago... >>

RevdTess · Post by **RevdTess** » 01 Feb 2007, 13:14

Cantarell has improved a bit in Jan 07, suggesting that maintenance was partially to blame for the very low Dec 06 figure. It's still crashing though. Look out below!

biffvernon · Post by **biffvernon** » 01 Feb 2007, 13:25

BBC news wrote:Mexicans stage tortilla protest

Mexicans are angry at the rise in price of their staple food
Tens of thousands of people have marched through Mexico City in a protest against the rising price of tortillas.
The price of the flat corn bread, the main source of calories for many poor Mexicans, recently rose by over 400%.

But some blame the rise on demand for corn to make environmentally-friendly biofuels in the United States.

The recent tortilla price rises have been the worst in decades, sparking fears that some could face malnourishment.

For many of Mexico's poorest people the tortilla is a staple of their diet, with as much as a third of their wages being spent on the bread.

Under the 1994 North American Free Trade Agreement, Mexico used to get cheap corn imports from the US, but Mexico's Economy Minister Eduardo Sojo has said that with more US corn being diverted into ethanol production, supply is dwindling.

http://news.bbc.co.uk/1/hi/world/americas/6319093.stm

Andy Hunt · Post by **Andy Hunt** » 01 Feb 2007, 13:37

Scary stuff. Coming to a neighbourhood near you - soon.

We are sooooo lucky to live in one of the richest countries in the world. Let's hope it stays that way.

simonrichards912 · Post by **simonrichards912** » 01 Feb 2007, 13:41

UL plc's wealth are only numbers on a computer screen somewhere, we don't have much inherent wealth left now most of the coal, minerals and oil are gone, the land has be raped and the sea overfished. We are a service economy that sells brainpower and we are no more intelligent than any other country.

grinu · Post by **grinu** » 01 Feb 2007, 13:46

Although are still a big player in terms of technology. Long may it continue........

Post by **clv101** » 01 Feb 2007, 14:31

simonrichards912 wrote:We are a service economy that...

...still ranks highly in the global top 10 when it comes to manufacturing output.

http://management.curiouscatblog.net/20 ... countries/

Totally_Baffled · Post by **Totally_Baffled** » 01 Feb 2007, 14:38

clv101 wrote:
simonrichards912 wrote:We are a service economy that...
...still ranks highly in the global top 10 when it comes to manufacturing output.

http://management.curiouscatblog.net/20 ... countries/

Damn you beat me to it!

bigjim · Post by **bigjim** » 01 Feb 2007, 15:37

I don't feel very well any more

Pippa · Post by **Pippa** » 01 Feb 2007, 15:49

According to Wikipedia in 2003 manufacturing accounted for 16% of national output.

Loads more figures in the CIA factbook.

What puzzles me is exactly what this manufacturing is?! (scratching head).

I actually hardly know anyone who manufacturers anything anymore. I used to know folks who worked in an underwear factory but that closed down years ago and dissapeared off to Philipines and China. I know someone who puts together various bits of electrical stuff into packs and plenty of people who work in offices, construction and the catering and food industry.

Who knows anyone who actually makes stuff other than houses and food?

I wouldn't be suprised if the biggest % of the manufacturing done in the UK was now processed food and all the ancillary stuff that goes along with that like artificial colouring, packaging (I do know someone who works at a factory making cardboard boxes), refridgeration units, shop fitting shelves etc.

Pippa · Post by **Pippa** » 01 Feb 2007, 15:51

bigjim wrote:I don't feel very well any more

Post by **clv101** » 01 Feb 2007, 15:58

Pippa wrote:I actually hardly know anyone who manufacturers anything anymore.

Oh yeah, there's not many "people" involved in manufacturing these days but the productively is still high.

Off the top of my head, cars, aerospace, petrochemicals, pharmaceuticals, food, drink, tobacco...

Aurora · Post by **Aurora** » 01 Feb 2007, 16:36

clv101 wrote:
Pippa wrote:I actually hardly know anyone who manufacturers anything anymore.
Oh yeah, there's not many "people" involved in manufacturing these days but the productively is still high.

Off the top of my head, cars, aerospace, petrochemicals, pharmaceuticals, food, drink, tobacco...

I have spent thirty six years of my life in the analytical instrument field and have witnessed the pharmaceutical, chemical, petro-chemical and engineering industries change dramatically.

Most 'bulk' UK manufacturers have found it hard to compete and have increasingly turned to China, India or some of the former Soviet block countries for their supply.

Increasingly many international companies have moved UK production to Poland or Hungary. Our future seems to lie with small to medium sized, low volume, specialist manufacturers. No bad thing if you are fortunate enough to work for one of them.

Take a look around some of the industrial estates in the North West and Midlands. The large TO LET signs tell the real story.

bigjim · Post by **bigjim** » 01 Feb 2007, 17:19

Pippa wrote:
bigjim wrote:I don't feel very well any more

What I meant was, Cantarell's the second largest oil field in the world by production, if I remember correctly. And now that's buggered, it just makes PO seem more real.

My original sentence was too cryptic I guess!

XENG · Post by **XENG** » 01 Feb 2007, 17:40

Aurora wrote: Take a look around some of the industrial estates in the North West and Midlands. The large TO LET signs tell the real story.

I'm from near a small town in the midlands called Bromsgrove, it used to be a centre for quality manufacturing (the gates to Buckingham Palace were made there), but it is mostly gone now, the steel works is now a housing estate.
However there are still quite a few industial estates where some manufacturing goes on and they're still building more on top of nice green countryside, the only difference is now most of the new buildings are offices.