Mexico has long been in the world’s top 10 in terms of oil production. For years, that was buttressed from the massive flows from one huge gusher: the Cantarell field. At one point Cantarell was one of the largest oil fields in the world, by some estimates second only to Saudi Arabia’s Ghawar.
Production originally started at Cantarell in 1979. But after several decades of producing well over 1 million barrels per day, Cantarell began to decline. Mexico’s state-owned oil firm Pemex undertook nitrogen injections to keep up pressure, and that worked for a while. The company managed to boost production in the early 2000s, with output hitting a peak in 2004 at 2.1 million barrels per day.
But since then, production from Cantarell – which has been the core of Mexico’s oil production – has gone into swift decline.
A Turnaround is Here
However, the Mexican government has gone to great lengths to repair its flagging oil sector and stop the hemorrhaging. The monumental energy reform package pushed through by President Enrique Peña Nieto, while controversial, could attract the international investment needed to turn things around.
And just as the first major auctions are set to kick off, a dramatic announcement was made that couldn’t have come at a better time.
Pemex announced on June 10 that it had succeeded in discovering a major new oil field in the shallow waters off Mexico’s Gulf…