Mexico oil output headed for record low as Pemex woes mount

Mexico oil output headed for record low as Pemex woes mount

ADAM WILLIAMS

MEXICO CITY (Bloomberg) -- Mexico is headed for its lowest annual oil production on record as state-owned Petroleos Mexicanos prepares for an influx of foreign investment.

Mexico produced 2.35 MMbopd this month through Dec. 28, according to data the Mexico City-based company posted online. Based on that preliminary rate and averaged with other monthly data this year, Pemex produced 2.43 MMbopd in 2014, for a 10th consecutive annual output decline.

That figure, which may be further reduced to reflect measurement problems announced in August, would be the lowest annual output since at least 1990, when the government first began releasing data. Daily production has fallen by almost 1 million barrels since a 2004 peak.

Mexico’s Energy Ministry sees outside investment ending declines in the world’s ninth-largest oil producer, with output expected to increase 500,000 bpd by 2018. President Enrique Pena Nieto passed legislation last year to allow private producers such as Chevron Corp. and Exxon Mobil Corp. to pump crude in Mexico for the first time in 76 years.

Pemex originally forecast production of 2.5 MMbopd this year, a number that was revised to 2.35 MMbopd in August to reflect water content and inaccurate measuring systems.

Pemex forecasts oil production will reach 2.4 MMbpd in 2015, according to exploration and production director Gustavo Hernandez. The company may revise historic production figures from the first six months of the year to reflect inaccurate measurements, he said.