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Pemex Oil and Gas Reserves Drop by Half Since 2002; Total Oil Production Down 2.3% in 2006

On the occasion of the company’s 69th birthday, Pemex (Petróleos Mexicanos) CEO Jesus Reyes Heroles said that the company’s oil and gas reserves have dropped by half since 2002 to 15.5 billion barrels of oil equivalent as of 1 Jan 2007, down from 16.5 billion a year earlier and 30.8 billion in 2002, due to a lack of investment.

Pemex replaced 41% of its produced reserves last year; at current production levels, the hydrocarbon reserves will last another 9.3 years, according to the CEO. The 41% replacement was an improvement over the 26.4% replacement the year earlier, but still far short of the 100% target.

Reyes Heroles is calling for a new operating model for the state-owned company, which is state-owned. Mexican President Felipe Calderon, meanwhile, called for shoring up Pemex while avoiding privatization.

Pemex oil production peaked in 2004, and its largest field, Cantarell, is in accelerating decline. (Earlier post.)

While Cantarell’s average output for 2006 was 1.788 million barrels per day, production dropped from 1.978 million barrels per day in January 2006 to 1.493 million barrels per day in December 2006.

Although the sharp decline was partially offset by production from other fields, Mexico’s total petroleum production dropped 12% from 3.371 million barrels per day in January 2006 to 2.978 million barrels per day in December 2006, for an average 3.2 million barrels per day, down 2.3% from the year prior.

Petróleos Mexicanos was established by a decree of the Mexican Congress, effective on 20 July 1938, following the nationalization of the foreign-owned oil companies which were operating in Mexico. Pemex is one of the top three providers of crude to the United States.



Amount of proven reserves are, actually, straight function of money spent for exploration. The more money spent, the bigger proved reserves. At least so far.

Lou Grinzo

Yes, reserves (and production) are a function of economics , but only in the short run. In the long run geology wins, as it puts an absolute limit on what can be pulled out of the ground.

This is the fundamental issue right now. Worldwide we have horribly incomplete and misleading information about the oil reserves of many exporters, especially Saudi Arabia, so we're forced to guess what it means when Saudi output falls. Have they peaked? Are they cutting output to jack up prices? Are they pumping as fast as they can right now, but output will improve with more development of oil fields? We just don't know.

I highly recommend the ongoing discussion about Saudi reserves and production over at


If reserves were simply a function of economics, the U.S. would not have peaked in the 1970s.

Harvey D.

Assuming that about 1000 trillion barrels remain in the ground, reserves will be down to almost '0' in about 27.4 years, unless :

1) consumption slows down and/or
2) other major sources are found.

Economics (lasting financial depressions) + the arrival of alternative fuels + hybrids + PHEVs + BEVs can reduce fossil fuel consumption growth and extend reserves for many more years.

New technologies + higher crude oil prices will translate into increased reserves and production from shales, tar sands, remote areas, deep sea etc.

It would be surprising to see what $100+/barrel would do to reserves, production and consumption.


I recall an article here on a micro-drilling system here that could make perhaps 10% of 218 billion barrels of inaccessible oil in the United States into and economical resource. That would almost double our "proved reserves" at a stroke. Add EOR and other techniques, and we may be able to pull out even more than that.

Reserves really is a function of technology. If drilling tech had remained at century ago levels we would have run out of oil long ago.

Now, the problem for Mexico and other nations with state oil companies is that they depend on oil for a huge portion of revenues. In Mexico it's something like 40%. This actually hinders oil exploration and production investment, even with high prices, because they don't have the money to maintain production.


Here's the micro-drilling.


My impression is that the NOCs technology is well (no pun intended) behind the IOCs. I also have to wonder how radically different their decision making processes are. Any company insiders with some insight?


The us peaked simply because we locked away most of our reserves in protected areas. Also alot of our reserves are in DEEP ocean areas we cant currently tap.

Finaly a great deal of our reserves simply were never looked for because our oil wasnt good enough to bother looking for at the time.

da vinci


...the more you talk the more you show your complete ignorance and continued allegiance to cheap demagogy ...

...Hubbert equation is a second order ODE, Q is the dependent variable, t is the independent variable, dQ/dt is the rate of change of production with time, there is no money there... none ... zero ...

... what has been true so far is that Hubbert was proven right as right can be, while you continue to be completely wrong ...

... no one expects any 'big' oil find anywhere in the world ... nobody ... 1-5b barrels is considered big today ... money is not the issue ... using one barrel of energy equivalent to extract one barrel of oil is ... mass/energy conservation is clearly beyond your understanding ... why don't you care ?


da vinci:

Hold on a second, there. Economics do play a very significant role. The Saudis and other Middle Eastern producers have major advantages when it comes to their production costs, generally only a few dollars per barrel. American companies could not compete against that, at least until prices rise high enough to uncap wells or marginal sources (like oil sands) that are otherwise uneconomical to produce.

Also, while huge new oilfields are unlikely to be discovered, we are finding technologically innovative ways to revitalize old wells previously thought dry. There's a field here in California that's been producing quite well for a century now, recently featured in an NYT article.


Cervus:  The Kern River field has been featured recently at The Oil Drum, and the facts point to a very different conclusion from the one reached by the (easily duped) NYT writer.


Da vinci, address your “arguments” not to me.

IEA in 2006 report predicts world oil demand in 2030 will rise from 80 mbd to 118 mbd. Oil prices predicted to be 57$ per barrel in 2004 dollars. Most of the increase in demand will be met by increased production in non-OPEC countries:

I hope IEA will be glad to hear from you.

tom deplume

Notice that the IEA predicts 'demand' not supply.


da vinci:

Personal attacks on this site are not necessary. Please save them for the school yard.

While I see the merit of Peak Oil theory, some of the mathematical models are just that, models that don't always apply well to the real world. Hubbert's predictions for the lower 48 states were relatively accurate (it peaked at the extreme high side of his predicted period at production levels higher than he anticipated) because of the closed nature of the area in question. The equations are subject to considerably more uncertainty when applied to an entire world filled with unpredictable humans, in many countries with diverse politics. To say that economics and politics play no part in oil production levels would be just as simplistic as saying that geology is irrelevant.

Stan Peterson

One significant difference between IOCs and NOCs is the people leading them. When have you ever met a politician who gives a ruddy damn about anything beyond the next election? Most think "long-term" is the next closing time for the next newspaper headline.

Hence NOCs are very present oriented, and will take todays oil revenues to spend on "social spending" such as welfare, buying votes, or buying jet fighter planes, in lieu of making investments to continue the revenue stream.

The other fallacy here is that taxes somehow help. If the higher prices could be mandated with the revenues going to the suppliers, then alternative oil sources
would open up and secondary and tertiary oil recovery would become economic. Or consuming producers would have both the incentive and the means to reduce their consumption, as in the case of the auto manufacturers.

But to just bleed both supplier and consumer for higher prices with the money going to politicians who did not do a thing to create or supply demand is utterly senseless. Neither the supplier or the consuming producer, have the means to invest in a better situation, or indeed any incentive at all.

The politicians are no different that the physicians who used to "bleed" patients to remove the "bad humors". They are rather like the protection racketeers of the mob, who skim a share from producer and consumer, aiding neither.

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