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		<title><![CDATA[Crude Oil Futures Trading Forum by Live Oil Prices - Mexico is in big debt, oil revenues down 40 percent in 2010]]></title>
		<link>http://www.liveoilprices.co.uk/forum/topic470-mexico-is-in-big-debt-oil-revenues-down-40-percent-in-2010.html</link>
		<description><![CDATA[The most recent posts in Mexico is in big debt, oil revenues down 40 percent in 2010.]]></description>
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			<title><![CDATA[Mexico is in big debt, oil revenues down 40 percent in 2010]]></title>
			<link>http://www.liveoilprices.co.uk/forum/post530.html#p530</link>
			<description><![CDATA[It's not hard to see that since early 2008 Mexico's deficit has grown to unsustainable levels. There are two major reasons for this escalation: a severe contraction in the Mexican economy and plummeting oil revenues.

As to the first point, Mexico's economy declined at a rate of more than 10 percent in the second quarter and at a rate of more than 6 percent in the quarter ended September 30. Analysts estimate that Mexico's economy shrank 7 percent in 2009.

And the nation's recovery doesn't look robust: Analysts expect the Mexican economy to grow 2.95 percent in 2010 and just 3.25 percent in 2011. The health of Mexico's economy depends heavily on what transpires in the US; unlike Brazil, China and India, there is little chance of the Mexican economy decoupling from the fortunes of its northern neighbour.

The second problem is just as insidious and has been building for some time. Mexico's crude production topped out at 3.4 million barrels per day in 2004, declined to 3 million barrels per day in 2007 and 2.8 million barrels per day in 2008.

According to PEMEX's estimates, production will total just 2.5 million barrels per day in 2010, and exports will be in the neighborhood of 1.1 million barrels per day--down over 40 percent from 2004.

This forecast has major implications for Mexico's fiscal health. State-owned PEMEX is the sole producer of crude oil and natural gas in Mexico; the company’s oil-related export revenues account for roughly 40 percent of Mexico's budget.

Mexico's two largest oilfields are Cantarell and Ku Maloob Zaap (KMZ), both offshore fields located in the Gulf of Campeche. Taken together, these two fields produced around 1.7 million barrels of oil per day in 2008, roughly 60 percent of the country's total production.

In the case of Cantarell, the project appears to have accelerated the subsequent rate of decline. As of May 2009, production from Cantarell had dropped to less than 700,000 barrels per day, its lowest level since the early 1980s!]]></description>
			<author><![CDATA[dummy@example.com (Rory)]]></author>
			<pubDate>Fri, 01 Jan 2010 09:15:31 +0000</pubDate>
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