Bloomberg:

Petroleos Mexicanos, Mexico’s state oil company, will probably report its fastest drop in production since 1942, eroding revenue as plunging crude prices limit the amount of cash available to drill for new reserves.

Pemex last year likely extracted 2.8 million barrels a day, down about 9 percent from the 3.08 million a day pumped in 2007, representing a total of $20 billion in lost sales, according to data compiled by the government and Bloomberg. The Mexico City- based company, which had revenue of $104 billion in 2007, plans to report annual production figures tomorrow.

By then, Cantarell may be producing less than 500,000 barrels a day of oil, Chief Executive Officer Jesus Reyes Heroles said last year. Output at the field, falling more than twice as fast as government estimates, dropped to 862,060 barrels a day in November from a year earlier, according to Mexican energy ministry data.

My comment: This has serious implications for the US down the road as we get about 10% of our crude oil imports from Mexico. It is not an issue now because oil prices are down so much due to demand destruction. I will give Pemex credit as they are the only NOC that is really open about their production issues. When Mexico becomes an oil importer in a few years and there is a lack of revenue for the Mexican government there will be a serious fiscal crisis there and guess where all the Mexicans are going to go.

John Polomny
The Real Deal