Mexico may succeed in bringing oil production only back to where it was three years ago by the time the current administration ends in 2018 despite a major reform to open up the industry, a senior government official said on Wednesday. In December 2012, the month President Enrique Pena Nieto took office, Mexican crude output was 2.56 million barrels per day (bpd), well down from peak production of nearly 3.4 million bpd in 2004. By this August, it had fallen to 2.25 million bpd.
Deputy Energy Minister Lourdes Melgar said that with output declining at aging fields and international crude prices down sharply since last year, it would take time for new projects to make up the shortfall. "The situation has obliged us to make adjustments," she said in an interview. "Just now, the most important thing is to arrest the decline in output and get back" to the 2.5 million bpd.
Asked whether that figure was the best Mexico could hope for by 2018, Melgar said, "At this point in time to 2018, taking into account the time it takes to produce, yes." That would be well below the target of 3 million bpd the government first set itself when Pena Nieto launched an overhaul of the oil and gas industry, which from last year opened up crude production and exploration to private companies.
Mexican output levels have also fallen because state oil company Pemex last year revised down its total crude production by more than 100,000 bpd, citing water and other impurities that had previously been included in reported volumes. In view of the headwinds, Mexico could not help any producers that may be looking to cut output to prop up prices, though it is ready to take part in a technical meeting called by Opec this month to discuss the market, Melgar said.