Pemex Cantarell Output Drops 34% on Spending Limits (Update1)

By Andres R. Martinez

July 7 (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.

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Falling production is curbing exports to the U.S., which buys about 80 percent of the oil Mexico sells abroad. Sales to the U.S. declined to 1.07 million barrels a day in May, the lowest since November 1995.

THIS is bad news

yes yes, bad bad news.
here's some more:
http://www.howestreet.com/audio/bwking26062008.mp3
if foreign investment into energy sector is rejected, Mexico is going to crash hard and the mexican BMW is probably the last stock market bubble to fall.

Mexico June oil output down 11.1 pct vs year ago

Sat Jul 25, 2009 4:04am

* June output falls 11.1 pct vs year ago

* Planned maintenance cuts 45,800 bpd

* Export volumes decline 12.7 pct (Recasts, adds details)

MEXICO CITY, July 24 (Reuters) - Mexican oil output fell below 2.6 million barrels per day for the first time since 1990 in June, hit by the relentless decline of the Cantarell field and maintenance, state oil monopoly Pemex said on Friday.

Oil production slid 11.1 percent compared to June 2008 to 2.519 million bpd. Exports of crude were down 12.7 percent at 1.236 million bpd over the same period, Pemex said.

The slide in production has prompted bond rating agencies to warn that the country's debt rating could be cut due to the government's heavy reliance on oil revenues.

Falling oil output has compounded the government's fiscal problems as it wrestles with a severe economic downturn that could be Mexico's worst recession since the Great Depression.

Output from Cantarell, once one of the world's most prolific oil fields, was 658,700 bpd in June, down 37 percent from a year ago. In addition to the natural decline of the field, planned work on a production platform at Cantarell in June cut output by 5,800 bpd.

In that report, I forecast the next oil crisis will unfold as Mexico loses the ability to export oil, starting sometime in late 2011. However, as so often is the case in this era of peak oil, that forecast now looks optimistic. Mexico will need all the oil they produce for their own economy. But to have an economy, Mexico will also need to solve the problem of another decline: the crash in oil revenues, upon which Mexico has depended for so many decades.