Oil Report

Mexico's Cantarell oilfield April output falls more

MEXICO CITY, May 26 (Reuters) - Crude oil output from Mexico’s struggling Cantarell field continued to fall in April, to 1.074 million barrels per day, energy ministry data showed on Monday, the field’s lowest production in years.

Cantarell, the fading jewel of Mexico’s oil industry, for years produced 60 percent of the country’s crude, but output has slid rapidly from peaks of around 2 million bpd in 2004.

The field’s April output was down from 1.113 million bpd in March and was 33 percent below what the field was producing in April 2007, underlining pressure on the government to push an industry overhaul through a bitterly divided Congress.

The sprawling offshore field, which state-run oil monopoly Pemex sees declining at around 15 percent annually, accounted for just 39 percent of Mexico’s total oil output in April.

A top supplier of crude to the United States, Pemex is trying to make up for Cantarell’s decline with higher output at less developed fields such as the offshore Ku Maloob Zaap complex and the onshore Chicontepec field.

Pemex also wants to reach potentially huge deep-sea fields in the Gulf of Mexico, but says that without an easing of constitutional barriers to taking on foreign partners, it could be 20 years before it is producing deepwater oil.

Mexico’s Senate is locked in a debate over the country’s troubled oil sector, with opposition parties strongly opposed to a government proposal to bolster the oil sector with more private-sector participation.

April was the seventh month running that Pemex fell short of its oil output target of at least 3.0 million bpd.

Energy Minister Georgina Kessel says that without reform, Mexico’s oil output could shrink to half its size by 2021. (Reporting by Catherine Bremer; Editing by James Dalgleish)