Tuesday, September 25, 2007

Mexico Will Run Out Of Oil In 9 Years

Analysts watch, wince as Mexico's oil supply dwindles.

"Mexico's oil production is in decline. There's probably no way to stop it," said Mike Rodgers, an expert at one of the top oil industry consulting firms, PFC Energy in Houston.

Mexico is the second largest supplier of oil to the United States (about 1.5-million barrels a day). But output from its major fields is dwindling fast, according to official figures from the state-owned oil giant Petroleos Mexicanos (Pemex). The country's known oil reserves will run out in nine years, the government says, potentially undermining the nation's oil-dependent budget.

Mexico's decline only adds more pressure to prices in a tight global oil market, which hit $83 a barrel Thursday. Worse still, its emptying wells are only a reflection of a global decline in aging oil fields around the world.

With no major oil fields left to discover, analysts say the world is approaching "peak oil," the moment at which oil production hits its maximum capacity and slowly starts to fall.

Mexican output peaked at just over 3.4-million barrels a day in 2004. "I don't believe we'll ever see it that high again, no matter how much is invested," said David Shields, an oil industry consultant in Mexico City.

Daily output at Mexico's biggest oil field, Cantarell, highlights the problem. Production there dropped by a staggering half a million barrels in the last 18 months, to 1.5-million barrels from 2-million. Once the world's second-biggest oil field, it is expected to continue losing production, down to as little as 600,000 barrels a day by 2013.


Anaconda said...


Mexico City (AP) April 11, 2008

Leftest lawmakers, of the PRD stormed the podiums of both chambers of Congress, forcing a recess, shouting, "The country is not for sale."

The protest was in reaction to President Felipe Calderon's energy reform bill that called for allowing private investment in Mexico's national oil company PEMEX.

And here you have it, in a nutshell, the problem with Mexican oil production.

This is not a shortage of supply, but a lack of production. The crude oil is there, in the Gulf of Mexico, but as is common with all nationalized oil, capital investment has lagged, and in due course, production begins to tail off.

Lack of capital investment does threaten "flow rates," the world over, among nationalized oil companies. Which sadly means well over half of total world oil production.

The oil industry is a ruthless dance. Every player is trying to maximize profit, nothing wrong with that, but for national oil companies, it's tempting to allow capital investment in new technolgy and new exploratory wells to fall off because static production means higher prices, right? Well, up to a point. But too much slippage and production drops off faster than new investment can build it back up.

Does anyone doubt Mexico has been sitting on its laurels, clipping its oil coupons? Does anyone really believe the Mexican half of the Gulf of Mexico is anywhere near phyiscally exhausted of oil?

Particularly with the successful advent of deepwater, deep-drilling oil exploration?

This is a not a physical shortage, but a bad business model -- in Mexico, it's politics as usual. The government has been depending on petroleum revenues to float the national budget for years. Robbing peter to pay paul.

Allowing private investment is a good thing, and necessary to reverse declining production.

It's Sad, but the leftest lawmakers have little or no grasp of the necessity of capital investment in the oil sector. What else is new for Socialists?

The United States must develop its own oil resources as opposed to depending on Socialist, national oil campanies.

And America can. If only it had the political will.

Another instance of politics effecting production.

Production, not supply is the key.

Anaconda said...


As Mark Twain famously said, "My demise has been greatly exaggerated."

So too for Mexican oil.

Mexico controls roughly half the Gulf of Mexico. Arguably, one of the greatest oil basins in the world. Cantarell is a super-giant oil field.

Remember Koudryavtsev's Rule: In areas with giant oil fields the geologic strata or column is rich in oil all the way down to the bedrock and beyond.

Or to make it simple:

Where there's oil,
there's more oil.

It's well known that the American half of the Gulf of Mexico is still producing large oil finds. Chevron's Jack 2 hit oil at over 20,000 feet below the floor of the Gulf in 7,000 feet of water. This is only one of many finds and promising drills. The area is networked with faults and fissures and sedimentary, oil trapping, reservoir structures. This network doesn't stop at the Mexico line. The whole Gulf is one giant basin.

In fact, Cantarell is just off the Yucatan Peninsula, across the Gulf from the Mississippi Delta region. This argues, that the Delta is not the determining factor for large oil deposits, and, indeed, Mexico's half may be the far richer half of the Gulf for total recoverable petroleum.

Eugene Island is an example of how rich this network of faults and sedimentary deposits is. As well as the "raining oil" phenomenom.

Taken together, these geologic factors strongly suggest much more oil can be found in Mexican's half of the Gulf of Mexico.

And, if abiotic origin is true, and that's looking more likely all the time, the Gulf of Mexico is possibly one of the areas where oil does recharge on a human time scale, as the fracture, deep fault network is one of the most active in the world.

I suspect American oil geologists have been given minimal access to Mexico's portion of the Gulf over the years for nationalist reasons.

These analysts are parroting "Peak" oil chatter because it's fashionable.

PEMEX's spokesman talked of nine years of proven reserves, but how much exploration has PEMEX done recently? I suggest not as much as they should have.

Mexico's half of the Gulf has not been nearly as thoroughly explored as the American half.

Maybe, what they need is American capital and technological know how.

But Mexicans have a hard time admitting they need el Norte.

Anaconda said...


The Cantarell oil field, one of the largest in the world sits off the Yucatan peninsula across the Gulf of Mexico basin from the Mississippi River Delta. This argues that the Delta is not the determining factor for large oil deposits. Something else is at work.

Why is this important and what has it got to do with a meteorite that struck earth 65 million years ago and many think killed the dinosaurs?

Well, according to "fossil" origin of oil theory, the major source for organic detritus and sedimentary geologic structures is the Mississippi River. And, while crude oil certainly has been found in the Delta region, the mother oil field of the basin (so far) is across the deep channel next to the Yucatan Peninsula, again, arguably in the area least influenced by the Mississippi effluent.

So, if the Delta is not the determining factor for large oil deposits, what is?

That's where the meteorite and abiotic oil theory come into play.

The meteorite hit some 65 million years ago, which many claim is well past the age of oil deposition (many claim the age of oil deposition was 90 to 140 million years ago), according to "fossil" theory.

The site of the meteorite impact was off the Yucatan Peninsula, it turns out, right in the area of the super-giant Cantarell oil field.

Is that a coincidence? Abiotic oil theory would suggest not. The force and energy released at impact of a meteorite the size that killed the dinosaurs was tremendous. It would be strong enough to fracture the basement bedrock in the area, which, indeed, scientific analysis has found it did. It also would displace and disperse much of the sedimentary deposits placed down in proceeding eons.

Abiotic oil theory contends that oil wells up from faults in the mantel, of course, the Gulf of Mexico was (and is) a tectonic boundary area before the meteorite ever hit.

What would be the effect of a meteorite impact, the size of the dino-killer, according to "fossil" theory? One could easily argue that it would displace and disperse the sedimentary deposits, and, therefore, the crude oil trapped in them as well. Theoretically, a good portion of the petroleum in the area would be destroyed, never to return.

(As opposed to the fact that the Gulf of Mexico is one of the richest petroleum basins in the world, and its sediments are rich in oil even at shallow levels that most assuredly would have been displaced, with the oil being dispersed by the meteorite impact.)

What about the effect a dino-killer meteorite would have under an abiotic theory of oil? Before the impact there was already a network of fissures and fractures due to the tectonic boundary being located in the area of the meteorite impact and throughout the Gulf. Possibly, oil was already lodged in sedimentary deposits, but the impact would dramatically "reactivate" the basement horst (fractued blocks). Oil in the displaced and dispersed sedimentary deposits would be lost as in the "fossil" hypothetical, but the sedimentary deposits would reform after the impact, and, rather, than being forever empty of oil, would be refilled by oil upwelling from the reactivation of the fissures and fractures already present in the tectonic boundary area that had been disrupted. In fact, this dramtic "jostling" could release even more oil than was present before the impact. And even shallow sedimentary deposits near the surface would refill with petroleum. The area of direct impact (the area of the most "jostling" or agitation) at ground zero could be associated with the biggest upwelling of oil, as indeed, we find today, the biggest oil field in the Gulf is located in the area of impact.

This would explain why the Mississippi Delta is not the determining factor for the size of oil deposits in the Gulf of Mexico.

Which theory better accounts for dispersal of oil deposits in the Gulf of Mexico? And better accounts for the impact of a meteorite so powerful it caused the extinction of the dinosaurs?

Will it also cause the extinction of the "fossil" theory, too?

And does it portend of much more oil in Mexico's share of the Gulf?

The evidence says, "Yes."

The scientific elegance of Abiotic oil theory is undeniable.

Anaconda said...


A key portion of the above discussion depends on the contention that the meteorite's impact would displace and disperse sedimentary deposits destroying the oil trapped within those deposits. Thus, the current presence of oil disproves the "fossil" theory of origin.

Objection could be made that the impact of the meteorite would not be powerful enough to displace or erode sedimentary deposits across the Gulf. No one can be sure how extensive sedimentary deposit disruption was as a result of the meteorite's impact.

But consider that the super-giant oil field Cantarell is within the immediate impact zone of the meteorite. In the immediate impact zone, it's unquestioned that the force drove down to the basement bedrock, scouring out all sedimentary deposits down to the bedrock. Clearly, all oil in this area was destroyed. Yet, here sits Cantarell, the largest oil field in the Gulf.

(All senarios of the meteorite's impact envision a catastrophic event with unimaginable destruction.)

Without question this oil field and its geologic structures formed after the meteorite's impact.

Abiotic oil theory presents a compelling theory of where and how the crude oil came from to constitute this super-giant oil field.

Anaconda said...

CORRECTION: To Comments #3 and 4, So a Meteorite Hit the Gulf of Mexico 65 Million Years Ago, Meteorites Impact on Abiotic Oil (Cont.).

"...[I]t turns out, right in the area of the super-giant Cantarell oil field." Comment #3.

"But consider that the super-giant oil field Cantarell is withing the immediat impact zone of the meteorite." Comment #4.

These comments need to be corrected. The Cantarell oil field is not in the "immediate impact zone" of the meteorite. The oil field is roughly 200 miles from ground zero.

So the "scouring out" comment is correct for the immediate impact zone, but not correct for the Cantarell oil field.

It is debatable how much impact the meteorite had on the Cantarell oil field.