Pemex, Mexico’s national oil company, has leased a new semi-submersible rig for deep-water drilling in a five-year deal worth almost $1bn. The rig, which is due to be completed by the end of 2009, will be able to operate in 5,000ft of water. Pemex only started exploring the deep water of the Gulf of Mexico in 2004, and is claiming some success in its exploration efforts. The question is whether the company will be able to develop any discoveries that it makes quickly enough.
Mexico certainly needs to do something, because its oil production has been in decline since 2004, according to the BP Review of World Energy. The US Energy Information Administration highlighted the issue in its recent International Outlook (pages 33-35), which took a much more negative view of Mexico’s future production than last year’s report. The prognosis has got Alan Greenspan worried about the country’s financial future. Cantarell, Mexico’s biggest field which produces about half the country’s oil, is in pretty steep decline, a fact that was predicted by some three years ago.
The problem, however, is that Mexico’s constitution largely forbids investment by foreign oil companies, a position enshrined in Nafta. Felipe Calderon, the president, has suggested he wants to change that. Unless he does, the exploitation of the Mexico’s deep waters is likely to proceed only slowly; probably too slowly to save Mexico from becoming a net oil importer at some point over the next ten years or so.
