The director of exploration and production (E&P) for Mexico's state-run oil monopoly Petroleos Mexicanos (Pemex) said the company is stepping up its spending to increase its proven reserves replacement from the current 15% a year to 77% by 2010.
Carlos Morales told analysts that he expects Pemex to invest between $1.6-2 billion a year over the next five years to boost the dwindling oil and natural gas reserves. Developing new fields, he said, "will allow for an increase in proven reserves through a significant reclassification of probable reserves to proven reserves."
In the past four years, Pemex has increased its annual investment in E&P to $9 billion. However, since 2000, it also has doubled its debt to $45 billion to increase oil and gas production, he said. With declining output at its largest oil field, Cantarell, and lowered gas production, Pemex has to find new reserves to take up the slack, Morales noted.
Before 2002, Pemex was spending about $400 million a year on E&P activities, but beginning last year, the spending rose to $2 billion as the company increased its exploration activities.
With the increased spending going forward, Morales said Pemex expects to boost crude output to 4 million bbl/d by 2008, which is 18% higher than 3.38 million bbl/d in 2004. Natural gas output also is expected to jump 31% to 6 Tcf/d in 2008 from 4.57 Tcf/d last year.
Last year, he said, Pemex's proven reserves dropped to 17.65 billion boe from 18.9 billion boe in 2003. At the end of 2004, Pemex had 20.4 Tcf of proven natural gas reserves. Proven and probable reserves totaled 41.1 Tcf, while proven, probable and possible gas reserves totaled 63.9 Tcf.
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