Petroleos Mexicanos (PEMEX), the state-owned Mexican oil conglomerate and major U.S. trading partner, announced a 6.4% decline in oil production during the first two months of 2008 yesterday.
“The Mexican government is assessing additional charges on PEMEX,” explains our oilman Byron King, “to cover administrative overhead of the Mexican government. So now PEMEX has less money with which to invest in new wells and upgrades.
“They are so far behind in new drilling and field upgrades that it will take a decade to catch up, if they start tomorrow. Which they won't. Even if they had the money to do it. Which they don't. Or if the cost of oil field equipment and services were not skyrocketing. Which it is.”
Mexico is the fourth largest source of crude oil imports to the U.S. Global exports for PEMEX are down 14%.
“The Mexican government is assessing additional charges on PEMEX,” explains our oilman Byron King, “to cover administrative overhead of the Mexican government. So now PEMEX has less money with which to invest in new wells and upgrades.
“They are so far behind in new drilling and field upgrades that it will take a decade to catch up, if they start tomorrow. Which they won't. Even if they had the money to do it. Which they don't. Or if the cost of oil field equipment and services were not skyrocketing. Which it is.”
Mexico is the fourth largest source of crude oil imports to the U.S. Global exports for PEMEX are down 14%.
No comments:
Post a Comment