Most folks are surprised to learn that the world’s second largest oil field is not located in
Cantarell Field, as it turns out, is a real freak of geology. The porosity - or holes in the rock where the oil is located - is believed to be the result of a rubble pile from an asteroid strike which took place some 65 million years ago! And not just any asteroid strike: The asteroid which caused what has become known as the Chicxulub Crater, on the
Cantarell was put on production in 1979. Production was 1.16 million barrels per day (1.16 MMBO/D) in 1981, and in 1995 production was still 1 MMBO/D. In 2000, PEMEX installed the world’s largest nitrogen injection project on Cantarell. In this process, nitrogen is stripped from air and injected into the upper parts of the reservoir in order to maintain reservoir pressure, and thus to increase or maintain production. Production increased to 1.6 MMBO/D in 2001, then to 1.9 MMBO/D in 2002, and then to 2.1 MMBO/D in 2003. By the end of 2005, however, production had returned to 1.9 MMBO/D. In January, 2006, a PEMEX press release unveiled their conclusion that Cantarell had peaked, and would decline down to a rate between 1.5 MMBO/D and 0.5 MMBO/D by the end of 2008. The attentive folks at the Wall Street Journal must have sensed the significance of this event, as they first ran this story on
As of the end of 2007, Cantarell was said to be producing 1.4 MMBO/D, or down some 600,000 BO/D (or 29 %) from its peak rate in 2004!
Why is this important? Well,
To put the ultimate loss of 1.5 MMBO/D out of Cantarell into perspective, consider the massive tar sands in
Put another way, if other declines ARE present around the world, and if there are not many provinces where the RATE is significantly increasing (such as with the Canadian tar sands), and if the increases from the tar sands can barely make up for Cantarell declines, then what significant capacity increases are available to make up for the other declines?So, Cantarell Field is a "poster child" for Peak Oil concerns.
Most recently we wondered, “If Cantarell is down significantly, and other Mexican production is up some, but not enough to compensate, what must be making up the balance?” Namely, if production is down and Mexican domestic consumption is flat or up (as is normal in a developing country), then imports must go up, or exports must go down, in order to compensate. In other words, something’s got to give.
After a little investigation, we were troubled by the conclusions.
First, using a decline profile we derived from the Oil and Gas Journal/El Financero/Sener data, we projected Cantarell to be down to 1.204 MMBO/D by the end of 2008.
Next, we arrived at the projected 2008 oil production by adjusting the 2007 figure of 2.925 MMBO/D (average of 11/2007 & 12/2007, from Reuter’s, 1/21/08, UPDATE 3-Mexico oil output, exports wane in 2007) for the projected 2008 Cantarell decline. (In doing so, we are assuming little if any increase in production from other Mexican fields for 2008. Since 2004, those other fields have only been able to increase production and make up for about 100,000 BO/D of the 600,000 BO/D drop in Cantarell production.)
We are still using the Mexican oil import number (that is, imports of oil into
Additionally, for 2008 we use the Mexican domestic consumption figure of 2.078 MMBO/D (also from the 2004 world factbook estimate). This seems too conservative, and unlikely. Namely, oil consumption increased in most developing countries over the 2004 – 2008 timeframe.
As to exports, the world factbook shows 2.268 MMBO/D was exported from
In summary, the projected 2008 Mexican oil balance of -730,000 BO/D doesn’t appear to be too far out of line with past “balances” shown by our rough calculations, but the concerns are:
- One would think that consumption in
would be up, over the last 4 years. Mexico
- It is unlikely
is still importing as much oil as in 2004. Mexico
- Exports show to be down 26 % since 2004! This is a significant trend!
- The “balance item” is substantial enough in relation to US imports of Mexican oil that it could materially impact that
import figure. US
Once again - conservation, alternative energy efforts and domestic exploration all must be significantly increased as it appears that the days are numbered as to getting a significant amount of oil from
- Prior to 2005, Cantarell produced at a flat rate of 2 MMBO/D for a short period of time. During this time the field was being injected with huge volumes of nitrogen for pressure maintenance.
- Mexican oil production has been widely quoted as 3.4 MMBO/D in 2004 – 2005, same figure also recently used in a Wall Street Journal (
- The Sener study, referenced in the recent El Financero newspaper article, in turn quoted by Oil and Gas Journal (
2-7-08), listed specific declines for Cantarell for 2005, 2006, 2007.
- Cantarell 2008 ending rate based on the production projection derived based on decline rates quoted in El Financero article.
- Declines from Cantarell applied to total, initial rate in 2005, so we are assuming the other production in
remains flat. Mexico
- Imports from world factbook page, assumed flat.
- Exports from world factbook page, assumed flat until new data for 2007.
- Consumption from world factbook page, assumed flat. But usually consumption increases over time.
- Balance should be zero, represents errors in one or more estimates.
- Imports from
into the Mexico , from EIA page. US
- Same as (11), but average for 11 months in 2007.
- From Reuter’s (
1/21/08), “UPDATE 3 – oil output, exports wane in 2007”. Mexico