Pemex Cuts Crude Goal as Cantarell Wanes Ahead of Energy Debate

Petroleos Mexicanos, the world’s fifth-largest oil producer, lowered a year-end 2013 output goal after failing to maintain crude from its Cantarell field.

While Mexico’s state-owned company known as Pemex plans to increase production in the second-half of the year, the average at year-end will be 2.541 million barrels a day, Carlos Morales, head of production and exploration, said today on a call with analysts. The estimate is 0.3 percent lower than December’s average of 2.549 million and 0.6 percent below the company’s goal to produce more than 2.55 million barrels this year.

Pemex has failed to halt eight years of production declines as output from Cantarell plunged more than 80 percent since 2004 to last month’s 388,000 barrels a day. Cantarell was the world’s third-largest deposit when it was discovered in 1976.

A bill that would end the government’s monopoly on production and allow for private investment is expected to be presented to congress when regular sessions resume by September, Mexican President Enrique Pena Nieto told Bloomberg in June. Mexico’s energy reform is expected to be submitted in the coming weeks or in a month, Pemex’s Chief Financial Officer Mario Meauregard said on today’s call.

Cantarell’s production has been limited by “the fractional water flow of wells and a natural decline in production,” the Mexico City-based company said today in a quarterly presentation. Cantarell produced 380,000 a day so far this month, heading for its lowest average on record, according to Pemex and Energy Ministry data.

Pemex earlier today reported its second-quarter net loss widened to 49 billion pesos ($3.87 billion) from the year-ago period. Sales slid 3.2 percent to 393 billion pesos on lower fuel prices and declining exports, the company said in a regulatory filing.

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