Cantarell Update - Akal Field Oil Layer Thinning 13 Ft/Month - 2009 Prod. Collapse Annualizes To 35%

MEXICO CITY (Reuters) - Mexico's state energy company Pemex is scrambling to extract what oil it can from its key Cantarell deposit as growing water and natural gas levels in the giant field depress yields of crude. Cantarell produced more than 2 million barrels per day as recently as 2004, but yield has plunged as the aging field enters its natural decline phase, sending Mexican oil production tumbling to its lowest level since the mid-1990s.

The giant offshore Akal field and several nearby deposits that Pemex groups as Cantarell produced only 713,000 bpd in April, below Pemex's forecast of 756,000 bpd for 2009. Yields from the area have fallen at annualized rates of more than 35 percent in recent months. Pemex engineers said at a conference last week that the oil layer of the Akal field is shrinking by at least 4 meters (13 feet) a month as gas moves downward and water moves upward in the rock formation.

Contraction of the oil layer means many of the traditional vertical wells Pemex has used to drain Cantarell since the late 1970s are getting flooded by gas or water, which forces their closure.

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Pemex upstream chief Carlos Morales said the Chicontepec project would reach 60,000 bpd by the end of this year, double current production but more than 10,000 bpd below Pemex's previous target. Engineers working on the Sihil field, a part of the Cantarell complex that currently produces about 35,000 bpd, said output would not reach the peak of 120,000 bpd this year. Pemex's official forecasts call for output from Cantarell to decline by 16 percent a year. Even so, the field still contains billions of barrels of recoverable oil.

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http://www.reuters.com/article/reutersComService_3_MOLT/idUSTRE55F4HK20090616

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