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UPDATE 1-Mexico crude oil output steady in May-Pemex
June 22, 2012 / 7:27 PM / 5 years ago

UPDATE 1-Mexico crude oil output steady in May-Pemex

MEXICO CITY, June 22 (Reuters) - Mexico’s state oil monopoly Pemex said on Friday crude oil output in May was 2.542 million barrels per day (bpd), little changed from the 2.540 million bpd produced in April.

Pemex said oil exports in May were 1.198 million bpd, down from 1.243 million bpd during the previous month.

Mexico relies on oil revenues to fund about a third of the federal budget, so any fall in output can put a strain on government finances.

The state-owned oil giant has managed to stabilize production since 2009, slowing the natural rate of decline at its largest, aging fields. Oil output peaked in 2004 at around 3.4 million bpd.

The company has struggled to replace lost production with new exploration projects and is hoping incentive-based oil contracts - approved in a 2008 oil reform - will help attract more private investment to the sector.

Pemex on Tuesday awarded four contracts to drill mature oil fields in the second round of bidding to open up the industry to more private investment.

The firm put six different areas in northern Mexico up for auction where several oil fields have been tapped by the company but are in decline. Two auctions were declared void.

More than a dozen companies or consortia were in the running for the contracts and Pemex chose the winners based on who could produce the most oil at the lowest cost per barrel.

The goal is to increase crude output at the fields by around 140,000 barrels per day (bpd) from the 13,000 bpd they are pumping today.

Major oil companies are eyeing prospects of more lucrative deep water deals in the Gulf of Mexico that are not likely to be unveiled until after a July 1 presidential election.

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