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Clarion Call from Cantarell
from Gregor.us by Gregor Macdonald
The eighth largest oil field in the world will be dead by the end of next year. Shall I repeat that, or did you get it the first time? Like the Time to Die Speech of Rutger Hauer at the end of Blade Runner, the Cantarell complex has surely seen its share of ocean storms, human hopes, and stars since its discovery by a humble fisherman in 1976. If you’re wondering whether that fisherman has a name, the man who saw oil floating on the surface of the ocean as he gathered his nets, the answer is yes: Rudesindo Cantarell. The days when you could find a supergiant oil field while fishing are over. Cantarell came late, in the oil age. That meant this global giant would receive all the best doctoring modern technology could provide. The result is that Cantarell was pumped out effectively and hard, especially after the technique to re-pressurize the field was adopted. This allowed for a spike high of daily production to be captured for several years, late in its life when a field would otherwise go into gentle decline. The result? Quicker monetization of the oil for the benefit of the Mexican state. But then the price: a catastrophic, fast crash.
Chris Nelder, energy analyst and author of Profit from the Peak, also watches Mexico quite keenly and we both had an enormously long telephone call about Cantarell back in early January, of this year 2009. While we both have been tracking the decline of Mexico’s oil production for years, and knew that Cantarell was crashing, I was shocked when Chris said, “Oh yeah. That field could head below 500 thousand barrels a day (kb/day) by the end of this year.”
Now, one has to realize that this conversation was occurring just after New Year’s, and the most recently available data was for November, which had closed out just 5 weeks earlier. In that month, Cantarell produced 862 kb/day. In addition, Cantarell had started 2008 with January production of 1243 kb/day. Now let’s look at Cantarell’s production numbers for the most recent month of 2009, in July: 588 kb/day. As someone remarked on The Oil Drum, this looks to be a linear, rather than an exponential decline. Interesting observation. If Cantarell is indeed losing a steady 35 kb/day a month in production, then by Christmas of next year we’ll be close to zero.
I covered the implications of this supply crash in the March issue of my Gregor.us Monthly newsletter, Saga North America: How The North American Oil Crisis Will Force Ottawa, Washington, and Mexico City to Confront One Another As Never Before. In that report, I forecast the next oil crisis will unfold as Mexico loses the ability to export oil, starting sometime in late 2011. However, as so often is the case in this era of peak oil, that forecast now looks optimistic. Mexico will need all they oil they produce for their own economy. But to have an economy, Mexico will also need to solve the problem of another decline: the crash in oil revenues, upon which Mexico has depended for so many decades.
http://gregor.us/
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i ended the title with "consequences?" how about no oil revenues for the mexican state? some domestic problems south of the border? spillover? just askin'.
from Gregor.us by Gregor Macdonald
The eighth largest oil field in the world will be dead by the end of next year. Shall I repeat that, or did you get it the first time? Like the Time to Die Speech of Rutger Hauer at the end of Blade Runner, the Cantarell complex has surely seen its share of ocean storms, human hopes, and stars since its discovery by a humble fisherman in 1976. If you’re wondering whether that fisherman has a name, the man who saw oil floating on the surface of the ocean as he gathered his nets, the answer is yes: Rudesindo Cantarell. The days when you could find a supergiant oil field while fishing are over. Cantarell came late, in the oil age. That meant this global giant would receive all the best doctoring modern technology could provide. The result is that Cantarell was pumped out effectively and hard, especially after the technique to re-pressurize the field was adopted. This allowed for a spike high of daily production to be captured for several years, late in its life when a field would otherwise go into gentle decline. The result? Quicker monetization of the oil for the benefit of the Mexican state. But then the price: a catastrophic, fast crash.
Chris Nelder, energy analyst and author of Profit from the Peak, also watches Mexico quite keenly and we both had an enormously long telephone call about Cantarell back in early January, of this year 2009. While we both have been tracking the decline of Mexico’s oil production for years, and knew that Cantarell was crashing, I was shocked when Chris said, “Oh yeah. That field could head below 500 thousand barrels a day (kb/day) by the end of this year.”
Now, one has to realize that this conversation was occurring just after New Year’s, and the most recently available data was for November, which had closed out just 5 weeks earlier. In that month, Cantarell produced 862 kb/day. In addition, Cantarell had started 2008 with January production of 1243 kb/day. Now let’s look at Cantarell’s production numbers for the most recent month of 2009, in July: 588 kb/day. As someone remarked on The Oil Drum, this looks to be a linear, rather than an exponential decline. Interesting observation. If Cantarell is indeed losing a steady 35 kb/day a month in production, then by Christmas of next year we’ll be close to zero.
I covered the implications of this supply crash in the March issue of my Gregor.us Monthly newsletter, Saga North America: How The North American Oil Crisis Will Force Ottawa, Washington, and Mexico City to Confront One Another As Never Before. In that report, I forecast the next oil crisis will unfold as Mexico loses the ability to export oil, starting sometime in late 2011. However, as so often is the case in this era of peak oil, that forecast now looks optimistic. Mexico will need all they oil they produce for their own economy. But to have an economy, Mexico will also need to solve the problem of another decline: the crash in oil revenues, upon which Mexico has depended for so many decades.
http://gregor.us/
-----------------------------------------
i ended the title with "consequences?" how about no oil revenues for the mexican state? some domestic problems south of the border? spillover? just askin'.
)
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