Oil Report

Mexico's Cantarell oil output recovers in Sept

MEXICO CITY, Oct 26 (Reuters) - Crude oil output from Mexico’s declining Cantarell offshore field recovered to 1.461 million barrels per day in September after a hurricane knocked down August production levels to 1.319 million bpd, the energy ministry reported on Friday.

The figure, posted on the ministry’s Web site a few days after state-owned oil monopoly Pemex announced its overall monthly production data, was still the second-lowest monthly output level this year.

It meant Cantarell, the jewel of Mexico’s oil industry since the late 1970’s but now reaching maturity, accounted for just 46 percent of the country’s oil production last month. For years it accounted for 60 percent of output.

Production at the field is down 130,000 barrels a day from January, within Pemex’s forecast that yields will decline around 15 percent this year.

Pemex is battling to make up for Cantarell’s decline with higher output at fields such as the offshore Ku Maloob Zaap complex and the technically tricky onshore Chicontepec field.

A tax overhaul passed by Congress last month that trims royalties on old oil fields should create more financial incentive for drilling at Chicontepec and abandoned wells.

Pemex -- a major supplier of crude to the United States -- is using horizontal wells that curve around to reach twisting, narrow oil seams to suck out the last dregs from Cantarell.