Will Mexican Oil Soon Be Tapped Out?

Wednesday, August 02, 2006

From a story by Marla Dickerson in the Los Angeles Times:

MEXICO CITY — Output at Mexico's most important oil field has fallen steeply this year, raising fears that wells there that generate 60% of the country's petroleum are in the throes of a major decline. . . .

Though analysts have long forecast the withering of this mature field, a rapid demise would pose serious challenges for the world's No. 5 oil producer. The oil field has supplied the bulk of Mexico's oil riches for the last quarter of a century, and petroleum revenue funds more than a third of federal spending. . . .

It would also be bad news for the United States, for which Mexico is the No. 2 petroleum supplier, behind Canada. And it could exacerbate tight global supplies that have kept oil at record prices. . . .