May 22 (Bloomberg) -- Petroleos Mexicanos, the state-owned oil company, should reconsider its $11.1 billion plan for the Chicontepec field because lower oil prices make the investment less attractive, said newly appointed board member Fluvio Ruiz.

“Pemex is being too optimistic about Chicontepec,” Ruiz said in an interview yesterday in Mexico City. “The Chicontepec recovery may not be too big, either in value or even production. The current price conditions may be a bit too onerous.”

Chincontepec will produce as much as 700,000 barrels a day in 10 years’ time under Pemex’s plan for the onshore field, from the current 35,000 barrels. That will help replace declining production at Cantarell, the world’s largest offshore field, where output dropped 38 percent this year through April.

Pemex plans to spend $61 billion in the next three years on Chicontepec and other new fields to maintain oil output after last year’s 9.2 percent drop, the largest since World War II. Latin America’s second-largest economy gets 40 percent of government revenue from Pemex and is the third-largest foreign supplier of oil to the U.S. after Canada and Saudi Arabia.

Ruiz, 42, joined the board on May 14 to serve for a three- year-period. Ruiz and three other new members were added to the board of Pemex as the first members outside of its union or Mexico’s government after new energy legislation came into force last year.

Budget Decided

“It’s still not clear how much power the new board members will have,” George Baker, a Houston-based energy consultant who publishes the newsletter Mexico Energy Intelligence, said yesterday in an interview. “We have to wait and see. In any case, the budget and investment plans for Chicontepec have been already decided.”

Mexico revised its laws last year to allow Pemex to hire non-Mexican companies to explore and produce oil. Pemex hasn’t found commercially viable oil in depths greater than 500 meters (1,600 feet). Mexico estimates it has 30 billion barrels of crude in deepwater deposits.

Pemex production averaged 2.799 million barrels a day last year, down from 3.083 million barrels in 2007. Production from Cantarell averaged 1.01 million barrels a day, from 1.471 million barrels the year before.

‘High Potential’

“Chicontepec is a long-term project of a very high magnitude with a slow development, but with a very high potential,” Chief Executive Officer Jesus Reyes Heroles told reporters on May 20.

Chicontepec, an oil field that lies in the states of Puebla and Veracruz near the Gulf of Mexico, is currently producing about 35,000 barrels a day, according to Pemex.

“I have the impression that Pemex is still seeing Chicontepec with the perspective from last year, but the prices are not the same,” Ruiz said. “This view is subject to a meeting that we may have in the following days with the production head.”

Oil prices plunged 58 percent from a record $147.27 a barrel last July. Crude oil for July delivery rose 2 cents to $61.07 a barrel at 10:45 a.m. on the New York Mercantile Exchange. The July contract is heading for a 7.1 percent gain this week. Prices are up 37 percent this year.

Energy Minister Georgina Kessel is Pemex’s chairwoman. Five union members and five government officials, including Finance Minister Agustin Carstens, also sit on the board. Two other government officials serve as a secretary and comptroller, according to Pemex’s Web site.

To contact the reporter on this story: Carlos M. Rodriguez in Mexico City at carlosmr@bloomberg.net.

Last Updated: May 22, 2009 11:40 EDT