Wednesday, March 15, 2006

Mexico announces new Supergiant field

So Mexico has announced a new super-giant field, potentially holding 10 billion barrels of oil. Good news for Mexico, pretty much a non-story for the rest of the world. Consider:

-Humanity uses 10 billion barrels every 4 months.

-This field holds "as much as" 10 billion barrels, which is something very different from actually having 10 billion barrels. The South China Sea was supposed to be the New Persian Gulf(tm) and that never happened. Same with Kazakhstan. I expect this discovery will be retroactively lowered. I certainly wouldn't count on seeing more than 5 billion barrels actually make it to market.

-This is an offshore field in the Gulf of Mexico. I don't know the exact location, but the odds are good that this field is going to be subject to hurricanes, like pretty much all of the Gulf of Mexico.

-Hurricane season '05: Sucked. '06: Gonna suck. As climate change gets worse: More suckage. Who wants to bet on this trend not holding?

-Mexico's largest field is already in decline. At best, this field will simply fill the growing hole in Mexican production. At worst, Mexico faces some lean years as existing production declines before they get the new field online.

Sorry to rain on your parade.

(Link via The Oil Drum.)

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