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The Oil & Gas Journal (OGJ) estimated that as of 2007, the proven oil reserves in Mexico were 12.4 billion barrels (1.97×109 m3). The US Energy Information Administration estimated Mexican proved reserves to be 10.3 billion barrels (1.64×109 m3) as of 2013.
Production
Mexico was the seventh-largest oil producer in the world as of 2006, producing 3.71 million barrels per day (590×103 m3/d) of petroleum products, of which 3.25 million barrels per day (517×103 m3/d) was crude oil. Mexican oil production has started to decline rapidly. The U.S. Energy Information Administration had estimated that Mexican production of petroleum products would decline to 3.52 million barrels per day (560×103 m3/d) in 2007 and 3.32 million barrels per day (528×103 m3/d) in 2008.
Mexican crude oil production fell in 2007, and was below 3.0 million barrels per day (480×103 m3/d) by the start of 2008. In mid-2008, Pemex said that it would try to keep crude oil production above 2.8 million barrels per day (450×103 m3/d) for the rest of the year. Mexican authorities expected the decline to continue in future, and were pessimistic that it could be raised back to previous levels even with foreign investment.
The constitution of Mexico gives the state oil company, Pemex, exclusive rights over oil production, and the Mexican government treats Pemex as a major source of revenue. As a result, Pemex has insufficient capital to develop new and more expensive resources on its own, and cannot take on foreign partners to supply money and technology it lacks. To address some of these problems, in September 2007, Mexico’s Congress approved reforms including a reduction in the taxes levied on Pemex.
Most of Mexico's production decline involves one enormous oil field in the Gulf of Mexico. From 1979 to 2007, Mexico produced most of its oil from the supergiant Cantarell Field, which used to be the second-biggest oil field in the world by production. Because of falling production, in 1997 Pemex started a massive nitrogen injection project to maintain oil flow, which now consumes half the nitrogen produced in the world. As a result of nitrogen injection, production at Cantarell rose from 1.1 million barrels per day (170×103 m3/d) in 1996 to a peak of 2.1 million barrels per day (330×103 m3/d) in 2004. However, during 2006 Cantarell's output fell 25% from 2.0 million barrels per day (320×103 m3/d) in January to 1.5 million barrels per day (240×103 m3/d) in December, with the decline continuing through 2007.
In mid-2008, Pemex announced that it would try to end the year with Cantarell producing at least 1.0 million barrels per day (160×103 m3/d). However, in January 2008, Pemex said that the oil production rate at Cantarell had fallen to 811,000 barrels per day (129,000 m3/d) by December 2008, a decline of 36 percent from a year earlier. This resulted in a decline of total Mexican oil production declining by 9.2 percent from 3.1 million barrels per day (490×103 m3/d) in 2007 to 2.8 million barrels per day (450×103 m3/d) in 2008, the lowest rate of oil production since 1995.
As for its other fields, 40% of Mexico's remaining reserves are in the Chicontepec Field, which was found in 1926. The field has remained undeveloped because the oil is trapped in impermeable rock, requiring advanced technology and very large numbers of oil wells to extract it. The remainder of Mexico's fields are smaller, more expensive to develop, and contain heavy oil and trades at a significant discount to light and medium oil, which is easier to refine.
In 2002 Pemex began developing an oil field called "Proyecto Ku-Maloob-Zaap", located 105 kilometers from Ciudad del Carmen. It is estimated that by 2011 the field will produce nearly 800 thousand barrels per day (130×103 m3/d). However, this level of production will be achieved by using a nitrogen injection scheme similar to that of Cantarell. That same year, Pemex decreased its reserve estimate by 53%, from 26.8 to 12.6 billion barrels (4.26×109 to 2.00×109 m3). Later the estimate was increased to 15.7 billion barrels (2.50×109 m3).
In June 2007, former U.S. Federal Reserve Chairman Alan Greenspan warned that declining oil production in Mexico could cause a major fiscal crisis there, and that Mexico needed to increase investment in its energy sector to prevent it.