Pemex announced another substantial year over year drop in oil production from its huge Cantarell field in June.   June production was 1.017 mb/d, compared with 1.038 mb/d in May  and 1.074 mb/d in April, but it was 35% less than June, 2007.  This is reported to be the fastest decline rate in 12 years.

Total Mexican oil production in June dropped 11.4%  from June, 2007 to 2.838 mb/d which compares favorably with May’s 2.79 mb/d.  The monthly increase is due to the fact that, “The company is pumping 33 percent more from the Ku-Maloob-Zaap field to make up for the decline at Cantarell.”

June’s exports to the U.S. were 1.139 mb/d compared with 1.439 mb/d in April and 1.64 mb/d in April, 2007.  Thus, even as total oil production by Mexico is growing slightly, export capacity is declining substantially due to greater internal usage, presumably. 

According to an earlier report, Mexico’s total oil production is expected to rise by 4.3% in 2009 and then go into decline in 2010.  Considering that Mexican exports are declining even as production is stable to growing slightly, a steady decline in their production starting 2010 could mean that Mexico could well be unable to supply the U.S. with any oil by 2014.  

Here is the report from Bloomberg:

Pemex Oil Production Falls 11% in June on Aging Field (Update2)

By Andres R. Martinez

July 21 (Bloomberg) — Petroleos Mexicanos, the state-owned energy company, said oil output fell 11 percent in June from a year earlier as new wells failed to keep pace with a four-year decline in the aging Cantarell field, the nation’s largest.

Production dropped to 2.839 million barrels a day in June from 3.206 million a year earlier, the Mexico City-based company, known as Pemex, said today on its Web site.

At Cantarell, where a drop in pressure is making it more difficult and costly to extract oil, the company pumped 1.017 million barrels a day, down 35 percent from a year earlier and the fastest rate of decline in 12 years, Pemex said. The company is pumping 33 percent more from the Ku-Maloob-Zaap field to make up for the decline at Cantarell.

A four-year drop in production and reserves put pressure on Pemex to spend more on exploration at a time when oil prices are the highest ever. The company estimates the drop in output costs about $20 billion in lost revenue annually, and President Felipe Calderon has proposed reforms that seek to give Pemex more freedom to manage the state’s resources and choose projects.

Mexico’s Congress wraps up 71 days of debate on Calderon’s oil-reform bill tomorrow. His bill would give Pemex more freedom to hire foreign and private oil companies to explore, produce, refine and transport oil, freeing up cash that would allow Pemex to explore for more oil.

Declining Pressure

At Cantarell, Pemex has been injecting nitrogen for more than 10 years to slow the pace of pressure loss to extract more from the oilfield, which is the world’s third largest. The development topped out at 65 percent of the company’s 3.3 million barrels of daily crude output in 2003.

The world’s largest oil field is Ghawar in Saudi Arabia, followed by Burgan in Kuwait and Cantarell.

Mexico, the third-largest supplier of crude to the U.S., exported 1.415 million barrels in June, down 19 percent from the previous year, the Energy Ministry said. Exports to the U.S. fell 19 percent to 1.139 million barrels a day from a year earlier, the ministry said.

The first- and second-largest suppliers of crude to the U.S. are Canada and Saudi Arabia, U.S. Department of Energy data show.

Mexico’s natural-gas production rose 13 percent to a record 7 billion cubic feet a day in June from a year earlier, Pemex said on its Web site.