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Pemex Cantarell output drops most since 1995 on spending limits
Andres R. Martinez, Bloomberg
Crude output from Mexico’s Cantarell, the world’s third-largest oil field, is falling at the fastest pace in 12 years as investment limits keep state-owned Petroleos Mexicanos from fully exploiting deposits and finding new ones.
Production at the Gulf of Mexico development dropped 34 percent in May from a year earlier, the biggest decline since October 1995, according to data compiled by the government and Bloomberg. That was when Hurricane Roxanne’s 131 miles-per-hour (114-knot) winds shut down offshore wells for a week.
(7 July 2008)
Contributor Jersey Geoff writes:
More bad news from one of the USA’s largest suppliers and trading partners. Given that 37 pct of the Federal Mexican budget is derived from PEMEX’s activities, Mexico has an extremely difficult choice now for future:
Option 1- start reinvesting to boost production by cutting Pemex’s tax load and boost other taxes 37 pct and drive the entire upper and middle class out of the country
Option 2- amend the Constitution to permit non Mexican ownership of petroleum assets
Option 3- let the exports dwindle
No good solution
Chinese and Japanese best-placed for oil contracts in Iraq
Stèphane Bussard, Le Temps via truthout
The Iraqi government has still not concluded a single contract.
Monday, the Iraqi oil minister officially invited 35 oil companies to make their offers for development of the oil fields of the country that holds the third-largest proven reserves in the world, estimated at 117 billion barrels. According to intelligence gathered by Le Temps, Shell will obtain the Kirkuk field in the north and the Buzurgan field in Missan Province. BP is likely to be assigned the Rumaila field. On Tuesday, at the Global Oil Congress in Madrid, Total’s boss, Christophe de Margerie, stated that his company was on the verge of signing contracts. The French major could obtain the Nahr Amer and Majnoon fields. It also counts on developing part of the West Qurna field along with Chevron-Texaco and Lukoil would get another part of that same field.
The Western press talks primarily about Western oil companies, although it’s the Chinese and the Japanese that are the best-placed in the race for contracts. … CNPC, which holds the sole valid contract concluded in 1997 under Saddam Hussein, and Japex are ready to get to work. Their contracts are still “baking.” Officials at the two Asian majors are waiting until Iraq has a legal foundation – the new oil law is still blocked in Parliament – to go into action. But the two companies are already looking for derricks to install on the existing Ahdab and Gharraf fields – which have not yet ever been exploited. Author of a report on Iraqi oil for IHS Petroconsultants, Mohamed Zine, emphasizes that “Beijing and Tokyo don’t negotiate contracts only; they’re ready to grant vast loans for construction and improvement of Iraq’s infrastructure.” Another great advantage: Japex and CNPC are likely to obtain long-term contracts allowing them to take a share of production. The Western majors will have to settle for technical assistance contracts with a maximum two-year duration that don’t require Parliament’s endorsement, but that do allow them to deal with the most urgent matters first: to restore threatened oil fields.
(2 July 2008)
Genesis of a giant
Peter McKenzie-Brown, The Oilsands Review. via Language Matters
Syncrude triumphed over an era which was eerily similar to the one we’re in today.
Many commentators have remarked upon the likenesses between then, the 1970s, and now. A financial crisis in the United States led it in 1971 to end the link between the dollar and gold and to adopt a wave of protectionist policies. America and its allies were mired in interminable and expensive Asian wars. Because of high liquidity in capital markets, price inflation became endemic. Stock markets flattened and employment in non-resource sectors slumped. Rapidly rising food costs contributed to great suffering in the Third World, as it was then known, and to the poor in the richer countries.
After a 20-year decline, in 1973 real oil prices rose rapidly because of new demand, declining supply from key producers, and geopolitical events focused in the Middle East. The oil industry boomed; drilling, development and construction costs skyrocketed. As the decade wore on, the belief that oil was about to “run out” became widespread. So did the view that humanity would soon choke on its own pollution. By the end of that spooky period, forecasts of oil prices tripling from their already high base were common.
Given the similarities between that era and this, it is ironic that the early 1970s were a threat to Syncrude’s existence. The giant seemed doomed until three governments agreed to serve as midwives. This largely forgotten tale is an important part of the plant’s heritage. Few people remember that today’s world beater was nearly the victim of a breached birth.
(6 July 2008)
Looks like a PR (public relations) piece, but one that is much better written than the usual. Helpful in understanding how Syncrude sees itself. -BA
