CAPITAL: Mexico City
MONETARY UNIT: Peso
REFINING CAPACITY: 1,525,000 b/d
OIL PRODUCTION: 2.9 million b/d
OIL RESERVES: 28.4 billion bbl
GAS RESERVES: 30 tcf
Mexico`s oil and gas reserves came into focus due to several developments in 1999.
Pemex announced in April a reduction in oil reserves to 24.7 billion bbl from 45 billion bbl, effective Jan. 1, 1999. The new gas reserves figure was 45 tcf. The numbers reflected an audit by outside engineering consultants.
The figures don`t reflect expected vast geologic potential that could be exploited by Pemex or, if the government changed the rules, outside companies. Pemex had large projects under way designed to boost both oil and gas reserves. It was also expanding gas utilization, deregulating the gas business, and modernizing refineries.
Upstream developments
A major deeper-pool discovery of Maya-grade oil plus gas at Cantarell in the Bay of Campeche reminded observers of Mexico`s potential.
Sihil, to which Pemex attributed 1.4 billion bbl of reserves, was one of four undisclosed discoveries analysts said contain 1 billion bbl or more each.
Another project to add reserves was nitrogen injection into Cantarell complex fields in Campeche. Injection was to start in mid-2000 to recover 8.4 billion bbl of oil during 15 years.
Cantarell was producing 1.271 million bo/d and 500 MMcfd of gas in 1999 after 19 years on line. Cumulative production was 7 billion boe, about a third of combined proved and probable reserves, since 1979.
The project weathered allegations of contract and work irregularities.
Overall, Pemex kept 40-50 rigs busy during 1999 after running around 60 in the first 9 months of 1998.
GAS industry activity
Mexico was also working to boost gas reserves and debottleneck its gas industry.
In prospect were elimination of a 4% tariff on imported natural gas, unbundling of gas transportation and sales, in effect common carrier status for Pemex pipelines, and more connections with the US.
The US had seven border crossing points for gas, and an eighth was planned at Wilcox, Ariz., to serve a gas-fired power plant at Hermosillo.
Contractors to Pemex pressed gas supply additions with intensive drilling in the 50,000-sq-km Burgos basin along the US border with Texas.
A TransCanada PipeLines group started up the $266 million, 410-mile, 7.4 million cu m/day Yucatan Peninsular gas pipeline in September-October 1999.
Mexico, with the world`s highest residential use of liquefied petroleum gas, was also in a transition to an open market in LPG. Mexico consumed about 300,000 b/d of LPG in 1998.
The country was to drop price subsidies, slowly move to international prices for LPG, and eventually allow foreign participation.
Pemex let contracts for more refinery expansions and upgrades that would expand its capacity to process Maya heavy crude and make more unleaded premium gasoline.
