Oil and gas sector in mexico

Oil and Gas Sector in Mexico Overview of the sector In Mexico the sole producer of crude oil, natural gas and refined products is Pemex, the state owned company which is also the most important source of fiscal income to the government as oil revenues account for about 40% of Mexico's federal budget The Mexican petrochemical industry recently went through important changes due to the energyreform enacted in October 2008 to reactivate Pemex productivity. The situation of Pemex is critical as it has reduced consistently its oil production, has decreased provision of basic petrochemicals with only 6 refineries operating below capacity and facing financial and technological challenges. Despite ranking in 3rd place in crude oil production, and 12th in crude oil reserves, Mexico currentlyimports 41.8% of refined gasoline. The Mexican constitution provides that the Mexican nation owns all hydrocarbon resources in the country since 1938. Pemex is organized in four operating subsidiaries: Exploration and Production, Gas and Basic Petrochemicals, Petrochemicals, and Refining

Oil At the end of 2008, Pemex has 344 oil producing fields, 6382 producing wells, and 225 offshore platformsregistering total sales of US$ 98.2 billion dollars, however oil production has begun to decrease, as production at the large Cantarell field declines, until May 2009, Pemex achieve a daily average of 2.6 MMbd. Cantarell oil production decreased by 451 Mbd (30.1%) compared to 2007. Currently, Cantarell produces 753 Mbd per day and the Ku Maloob Zaap field has consolidated as the most importantreservoir with an average production of 803 Mbd. Both oil fields represent 1.556 Mbd, which accounts for 59% of the total oil production of Mexico. The Southwest Marine region contributed 517 Mbd, while the South, whose business is mainly concentrated in Tabasco, generated 485 Mbd and the Northern Region produced 93 mbd. From January to May 2009, Mexican oil price per barrel reached US$43.9,representing 51.2% less than previous period in 2008 mainly due to the world financial crisis. The income by means of exports reached 8.195 million dollars, about 59% less than the same period in 2008. In 2008, Pemex Refining produced 1,307 Mbd of refined products, where fuel oil, automotive gasoline and diesels represent the bulk of production, interesting to note is that the largest consumer of fuels inMexico are the Federal Electricity Commission and Pemex subsidiary entities. At the end of 2009, Pemex Refining owned and operated six refineries: Cadereyta, Madero, Minatitlán, Salamanca, Salina Cruz and Tula. In 2009 plans for a new refinery project have been disclosed and approved, the last refinery was built back in 1979, the new refinery will be built in Tula Hidalgo, with an estimatedinvestment of US$ 20.4 billion.

Hydrocarbon reserves The country's proven hydrocarbons reserves reached 14.7 barrels of oil equivalent (boe). Crude oil reserves on the basis of 2009 daily production, will last about nine years. Pemex does not have sufficient funds available for exploration and investment to reverse the decline, unless private investment is allowed. Pemex sees the onshore Chicontepecproject, located northeast of Mexico City, as a potentially large source of future production growth. Chincotepec contains an estimated 6.5 billion barrels of probable reserves.. However, the Chincotepec project is still in the very early stages of development, and there are no solid estimates available as to its full production potential As of 2009, PEMEX estimates proved reserves of 14.74 billionbarrels of oil equivalent (MMMboe), of which 71% consists of crude oil, 12% consists of condensates and liquids from plants and the remaining 17% is dry gas equivalent to liquid. Most are located on-shore and in shallow waters the target is to maintain the crude oil production level and through exploration activities find new oil fields upstream production strategy in deep waters includes the...