Mexico's Oil Exports Down To 1990 Levels In April - Drop Unprecedented Except For Hurricane Season

[hatrack]

Mexican oil exports plunged 18.2% in April to levels unseen since 1990 outside hurricane seasons, in more grim news for a key economic motor relied on for a major chunk of government revenues. Crude export volumes tumbled to 1.177 million barrels per day as yields at Mexico's aging Cantarell field continued to plummet, state oil monopoly Pemex said today.

Oil production declined 4.2% year-on-year to 2.642 million bpd in April, the fourth month in a row that it has been below a targeted level of 2.7 million bpd, according to a Reuters report.

Oil revenues are a key plank of Mexico's economy and the slide in exports was the latest gloomy data for a country already knocked into recession by a drop in US demand for its factory exports. Tourism revenues have also been dented this year by the H1N1 flu outbreak. The government depends on oil earnings to fund more than a third of its budget.

The head of the central bank warned this week that a plan to wean Mexico off of its dependence on oil was urgently needed given the dim prospects for boosting output in the medium term. Mexico is a top three oil supplier to the United States but production has declined steadily since 2004 as the country struggles to replace capacity lost at Cantarell. The United States risks becoming more dependent on less politically stable sources of oil as Mexico's output dwindles. Cantarell, which was pumping more than 2 million bpd in 2004, yielded only 713,000 bpd in April, down more than 35% from a year ago, according to energy ministry data.

EDIT

http://www.upstreamonline.com/live/article179174.ece

[GliderGuider]

1. Back in September 2007

I wrote an article predicting that Cantarell's output would decline by 75% by the end of 2008. It looks like I was a bit too pessimistic. It has only declined by 66% from its peak, and took an extra 4 months to do it. Things aren't nearly as bad as they might be...