Mexico City - Mexico's state oil company must modernize and look for new fields to stem a substantial fall in its oil production, a government report found. Mexico's oil fields are becoming tapped-out, and by 2021, it would produce 500,000 fewer barrels a day and bring in 14 billion dollars less per year than it does now, warned an Energy Ministry report on the condition of Petroleos Mexicanos, better known as Pemex.
Since 2005, Pemex has lost 10 billion dollars, largely because of shrinking production at its largest oil field, Cantarell in the Bay of Campeche off the coast of Veracruz state, the report said.
Most of Mexico's oil fields have reached the point where drops in production are beginning or have already begun, and it is urgent that alternative projects are found to maintain the current production level of 3 million barrels per day, the ministry urged.
The report was issued as the government of President Felipe Calderon is seeking reforms so the oil monopoly - which has provided a large amount of the government budget since it was made a state company in 1938 - would be able to hike production.
Among the reforms sought is allowing private investment to help Pemex modernize, but the proposal is controversial in a country where Pemex is a symbol of national pride.
Opposition leader Andres Manuel Lopez Obrador, who came close to winning the presidential election against Calderon two years ago, is leading the fight against the proposed reforms and organized a number of large protests, arguing that Pemex has the ability to modernize and increase production on its own.
But Energy Minister Georgina Kessel said in presenting her ministry's report that Pemex must be given the resources to exploit new sources of oil using the latest technology.
