Pemex to Invest $4.8 Billion in Oil Fields

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Researched by Industrial Info Resources (Sugar Land, Texas). This year, Mexico’s state owned oil company, Pemex, will invest $4.8 billion in two of its fields located in the Bay of Campeche: (1) Cantarell Field, which is the biggest field in the country and second in the world after Ghawar in Saudi Arabia, and (2) Ku-Maloob-Zaap (KMZ) field.

The Cantarell Field is a heavy oilfield, located 100 kilometers off the coast of the Yucatan Peninsula, in the Gulf of Mexico and it is the largest offshore development project in the world. Although Cantarell produces about 60% of Mexico’s oil output, it has experienced a decline in the field production in the last few years. The $2.3 billion investment aims at raising Cantarell’s production to 1.53 million barrels per day. Furthermore, in the first quarter of this year, six new development wells have been completed as well as nineteen major and nine minor repairs. Pemex also plans on elevating the KMZ’s production to 500,000 barrels per day by investing $2.4 billion. This field produces 15% of the country’s total oil output with a 496,000 barrel per day production last February.

Mexico is the ninth largest world crude oil exporter and a key supplier to the USA; however, Pemex faces two main problems--high levels of debt and the decline of its known oil reserves. The state-owned company is the world's most indebted oil company with a $52.5 billion liability. Furthermore, it is pumping faster than it can explore and its reserves have fallen for the last two decades. More exploration investments, such as the ones announced, are necessary to counteract a gradual production decline.

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