The news from Mexico just continues to get worse

SHOOT: The graph below says it all. The caveat is a find known as KMZ, but the problem is the quality of the crude is pretty bad.

TOD: Pemex is discovering that oil at KMZ is much heavier than anticipated. In fact, KMZ oil is often about twice as heavy as the Maya oil that is found at Cantarell, which is already classified as heavy. Further, official Pemex documents have shown that oil quality and production at KMZ are falling, as water and salt seep into reservoirs. These quality issues make optimistic projections of future oil production at KMZ highly questionable.

clipped from www.theoildrum.com The news from Mexico just continues to get worse with bad news from all three of their biggest oil fields, even as our perennial cornucopian talks of “a Mexican surprise.” As Gregor noted recently (h/t ft energysource) at the beginning of the year Cantarell was producing 862,000 bd and at the end of July this was down to 588,000 bd. The graph plotting decline continues to show a linear decent at the rate of 35,000 bd per month or roughly 100,000 bd every three months – giving it just 17-months at that rate (ending right at the end of next year) until there is nothing left. Somewhere in there the drop is likely to stabilize, but suddenly and soon the questions as to where the replacement hundreds of thousands of barrels are going to come from is going to stop being an almost academic exercise. Michael C. Lynch, president, Strategic Energy & Economic Research Inc., differs from the generally pessimistic consensus on Mexico. “I think Mexico will probably surprise many,” he said.