2nd largest oil field in the world, Mexico’s Cantarell, declining rapidly

Mexican oil exports: start saying adios!

by Martin Payne, 19 Mar 2008. Energy Bulletin.

1)      This story illustrates the problem of RATE of production – you might have a lot of oil, but if you can only produce it at x barrels per day, then you have x barrels and no more

2)      We get 10% of our oil from Mexico, and Cantarell rate of production has gone down 29% since 2004!

Cantarell Field is a “poster child” for Peak Oil. In my opinion, Cantarell/Mexico may be one of the most poignant, and easiest to grasp examples of what Peak Oil is all about.

Most folks are surprised to learn that the world’s 2nd largest oil field is not located in Saudi Arabia. Nor even in the Middle East. In fact, it is located offshore Mexico, in the Bay of Campeche, Gulf of Mexico.

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 Yucatan Peninsula, is thought to have been 6 miles in diameter, and many scientists attribute this particular asteroid strike as being the “extinction event” that took out the dinosaurs!

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 .5 MMBO/D by the end of 2008.

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, Mexico is the 3rd largest exporter of oil to the United States. Out of about 21 MMBO/D of total consumption we import some 60%, or around 12 MMBO/D.

Mexico makes up some 1.4 MMBO/D of that 12 MMBO/D, about 10 % of our total imports.

So, if Mexico can’t supply that oil – just get it somewhere else, right? Well it appears that there is little or no “spare” capacity in oil production RATE, worldwide. So, if we need 1.4 MMBO/D from Mexico but they can’t supply it, we either have to get that oil instead of someone else, or do without [2014 comment: we’ve been doing without, the financial crash has lowered demand to 16 MMBO/D due to the high levels of unemployment and poverty].

To put the ultimate loss of 1.5 MMBO/D out of Cantarell into perspective, consider the massive tar sands in Canada. Even though these tar sand RESERVES are huge, their production RATE is limited by the QUALITY of these deposits. Namely, one has to shovel, melt or dissolve this tar out of the ground. Today’s total production RATE from these tar sands, after huge efforts and investments of billions of dollars, only totals about 1.1 MMBO/D. And, with billions more invested, by 2015 they believe the rate can be increased by an additional 1.9 MMBO/D. If there weren’t any other RATE declines going on around the world, and if demand was not increasing, then the Canadian tar sands might be able to compensate for the loss of Cantarell.

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.

Mr. Payne is an “upstream oil and gas professional with over 25 years of experience. Past Chairman, Houston Chapter of the American Petroleum Institute (API). Member of American Society of Mechanical Engineers (ASME), Society of Petroleum Engineers (SPE), American Solar Energy Society (ASES).”

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