Mexico, Venezuela and the Oil Export Crisis

From Investor Village (investorvillage.com) via lifeaftertheoilcrash.net – 2/10/2010, we get this Chris Nelder piece of 2/5/2010 entitled “The Oil Export Crisis Has Unofficially Arrived (E&C)”.
This article gives, among some other things, a status report on our #2 source of oil imports – Mexico – and our #3 source, Venezuela. Here are a few highlights;

MEXICO:

• “… To update the data on Mexico, its now our #2 source of imported petroleum because Saudi Arabia has fallen from #2 to #4.
• As of November 2009 (the latest data available) the U.S. imported 1.08 mbpd of crude and finished petroleum products from Mexico. Its exports to the U.S. peaked at 1.46 mbpd in 2004, the same year its production peaked. Net exports (production minus consumption) fell to 1.06 mbpd in 2008.
  For the years 2005-2008, Mexico’s exports to the U.S. declined by 0.51 barrels per day. In 2010, supply is expected to fall to 2.5 mpbd — nearly half a million barrels per day less than 2009.”
• “Consequently, Mexico’s oil reserves have decreased by more than 75% in two decades (owing partly to the correction of a previous, ridiculously inflated figure), production has begun to decline and exports are falling fast.”

VENEZUELA:

• “… As of November, the U.S. was importing 0.9 mpbd from Venezuela, making it our #3 source. Its exports to the U.S. peaked at 1.8 mpbd in 1997, the same year as its production peaked. Net exports (production minus consumption) have fallen 38% from the 1997 peak of 3.1 mpbd to 1.0 mpbd in 2008.
  Venezuela’s oil exports to the U.S. have been declining markedly since 2004, after a long period of relative stability, from 2004 through 2009, Venezuelan petroleum exports fell 0.7 mbpd.”
• “Now Chavez is turning east for help in developing his nation’s oil and gas resources. Recent agreements include a $20 billion joint venture with Russia to develop the Junin 6 field in the Orinoco oil belt, … .
  China has agreed to build a refinery and develop the Orinoco heavy oil fields, and Venezuela has guaranteed 560,000 barrels per day to China this year.
  
• “Chavez will put exports to the U.S. on a short path to zero the first chance he gets.”

PH Comment: It looks like oil availability and prices are going to be problems for the U.S. in the not-too-distant future unless we have a war between Israel and Iran: then the not-too-distant future will become NOW.

Until next time; keep your eyes on the horizon as the weather’s changing fast.