The next Cantarell?

Big Gulf of Mexico oil find announcement

According to Mexican President Vincente Fox, Mexico has made a deep-water oil discovery in the Gulf of Mexico that could be larger than the country's giant Cantarell offshore field.

But let's look at the context. Slipped into the cited story is the following:

Original total reserves at Cantarell, Mexico's largest oil field, stood at 11.5 billion barrels but its output has been steadily falling. Production at Cantarell is expected to decline 6 percent this year, to 1.9 million barrels a day, and decline even more sharply in subsequent years.

Hmmm, that would seem to be the buried lead--Mexican oil production is on the precipice and ready to fall off the cliff. Then we read:

The fastest way for Pemex to get the oil out would be by forming alliances with companies that have the deep-water technology. However, current laws forbid private companies from exploration and production activities in Mexico except when they are under contract to Pemex.

Energy Secretary Fernando Canales told Dow Jones Newswires the ban on Pemex forming alliances for deep-water drilling would slow down the process of developing the reserves, but won't keep Pemex from getting at the oil.

"We don't need just one, but many wells," Canales said.

He declined to give further details of the new oil find.

The Fox administration has been attempting to ease foreign investment restrictions in the state-run energy sector. But all his initiatives have been blocked by the opposition-dominated Congress.

Is the hype about the size of the ``find'' pretty much dreaming? Are they just trying to push neoliberal policy through reluctant legislators? And check this out. We've heard it all before, back in 2004.

Also, see this in Deep Blade Journal. An un-named Pemex engineer in an interview posted on oilcast.com in December says flatly that ``the days of the Mexican super giants are over'' and that Pemex is ``in the middle of the Hubbert curve.''

Deepwater, or tar sands for that matter, are not the panacea that they sometimes are made out to be. And major world fields like Bergun in Kuwait, Cantarell in Mexico, and the North Sea are already in precipitous decline. That's the real story, not the hype of ethereal new oil finds.