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Hitches fixed: but concerns about the Cantarell field's future remain

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Pemex boosts January output

Mexican state oil monopoly Pemex said today its crude oil production rose to 3.153 million barrels per day in January, up 6% from December, as it fixed technical problems at its Cantarell oilfield.

It said production at Cantarell, a shallow field in the Gulf of Mexico, was up around 7% at 1.6 million bpd.

The figures, given around three weeks early, are estimates based on production data up until 29 January.

Pemex releases its operational statistics around the third week of each month, according to a fixed calendar, but decided to give the January figure early to reassure the oil industry after a plunge in output in December.

Overall crude oil output fell to 2.978 million bpd in December, its lowest level in years, as Pemex struggled with a fault at a gas-lift plant at the massive but aging Cantarell field and had to halt operations there for several days.

Oil markets and financial analysts alike are watching Cantarell carefully amid signs it is declining much faster than Pemex has predicted since output peaked there in 2003.

Mexico's economy leans heavily on oil exports, and the nation is a top three supplier of crude to the US.

Cantarell, which has historically churned out 60% of Mexico's oil, produced just 1.493 million bpd in December, down 25% from the 1.998 million bpd produced a year earlier.

A source at Pemex told Reuters yesterday that yields at Cantarell were sliding faster than previously feared, and said output at the 28-year-old oil field was now seen around 1.5 million bpd or less in 2007.

But the company said in today's statement that the rate of decline at Cantarell was "consistent with the way the oil field was expected to behave".

It said new drilling projects would continue to compensate for the decline in Cantarell.

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