Waiting for more barrels from Mexico. Pemex output way down for April.
Mexico oil exports plummet
Mexican oil exports plunged 18.2% in April to levels unseen since 1990 outside hurricane seasons, in more grim news for a key economic motor relied on for a major chunk of government revenues.
Crude export volumes tumbled to 1.177 million barrels per day as yields at Mexico's aging Cantarell field continued to plummet, state oil monopoly Pemex said today.
Oil production declined 4.2% year-on-year to 2.642 million bpd in April, the fourth month in a row that it has been below a targeted level of 2.7 million bpd, according to a Reuters report.
Oil revenues are a key plank of Mexico's economy and the slide in exports was the latest gloomy data for a country already knocked into recession by a drop in US demand for its factory exports.
Tourism revenues have also been dented this year by the H1N1 flu outbreak.
The government depends on oil earnings to fund more than a third of its budget.
The head of the central bank warned this week that a plan to wean Mexico off of its dependence on oil was urgently needed given the dim prospects for boosting output in the medium term.
Mexico is a top three oil supplier to the United States but production has declined steadily since 2004 as the country struggles to replace capacity lost at Cantarell.
The United States risks becoming more dependent on less politically stable sources of oil as Mexico's output dwindles.
Cantarell, which was pumping more than 2 million bpd in 2004, yielded only 713,000 bpd in April, down more than 35% from a year ago, according to energy ministry data.
The latest fall at Cantarell was partially offset by increased output at the nearby Ku Maloob Zaap offshore heavy oil field.
Ku Maloob Zaap, which recently overtook Cantarell as Mexico's biggest producer, yielded a record 814,000 bpd in April, near the maximum 820,000 bpd Pemex thinks it can produce.
Output at Ku Maloob Zaap is expected to begin to decline to 810,000 next year, however.
Pemex has vowed to end this year with oil output at 2.7 million bpd.
Executives say meaningful increases in production from the Chicontepec onshore project starting in July should reverse the trend of declining output in the first half of the year.
Analysts remain skeptical that Pemex will be able to achieve its production goals at Chicontepec, where billions of barrels of crude oil are tightly locked in isolated geological formations, making oil production costly and challenging.
Mexico's deep economic recession has cut at least temporarily Mexico's need for costly gasoline imports.
Pemex said gasoline imports dropped 4.6% to average 302,700 bpd over the first four months of the year.
Mexico depends on imports for approximately 40% of its gasoline supplies due to a shortage of domestic refining capacity.
Construction on a new 300,000 bpd refinery is due to start next year although the plant will not be finished before 2015.