Mexican oil production decline
Mexico faces a decline in oil production, which means the government faces a decline in revenue. What does that mean for governance? politics? state capacity?Thanks to Nan Wright, who teaches in Houston, and her daughter who pointed out this article from Rice University.
Baker Institute researchers conclude Mexico could become oil importer by 2020 without new investment
Without sufficient investments in upstream oil-field activities utilizing new and advanced technologies, Mexico faces the prospect of becoming a net oil importer in 10 years…
Mexican petroleum production has been falling -- more than 25 percent since its peak in 2004 of 3.9 million barrels per day. Mexico produced 2.98 million barrels per day in 2010… At present, Mexico is a net oil exporter, with total net exports in 2009 running at just under 1 million barrels per day.
These two trends -- lower overall production and growing internal demand -- pose serious challenges for the Mexican government…
Mexican leaders are keenly aware of the potential problems caused by falling oil exports and rising public expectations. Pemex has taken steps to slow the declining production by increasing investment in two newer fields…
The study's final determination is that the decline in Mexican oil revenues is likely to be gradual rather than rapid and reduce the chances that a sudden, deep crisis will create the political will to make hard choices or unpopular reforms. For instance, if Pemex is able to maintain production levels through new finds and better efficiency, it could postpone the export crisis for three decades. But even with this expanded time frame, it is not assured that Mexico will undertake an orderly adjustment…
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Labels: capacity, economics, Mexico, politics
posted by Ken Wedding @ 5:55 AM
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