There isn't really a need for much editorial comment. The numbers tell the whole story.
Bottom line: it isn't getting any better in Mexico.
Earlier today, Pemex, the country's state owned oil company, reported that its crude production fell by 6.9% year-on-year in February to 2.929 million b/d, while crude exports plummeted by 19.4% to 1.429 million b/d.
It's interesting to note that natural gas output in February, where there is foreign investment allowed, specifically in the Burgos Basin, was 6.54 Bcf/d, a record high for any month. It's up 12.5% from February of last year. There's no foreign investment allowed in other areas of the country.
The drop in exports is a sign of what is happening in numerous other oil exporting countries. Local demand is rising, and so not only did crude exports get hit, but Mexico's gasoline imports meanwhile rose by 32.8% year-on-year, to 338,600 b/d.
These numbers come just a few weeks after Pemex executives held a conference call to paint an optimistic picture. That call was to announce a full 2007 performance in which Mexican crude output was down 5.3%, to 3.082. So production already is down more than 150,000 b/d from the average 2007 output.
During that call, Pemex officials said the offshore Cantarell development, the heart of the Mexican industry, should stabilize its output at 1.2 to 1.3 million b/d this year; current production is in that range. Cantarell output suffered a 20% drop in 2007.
Mexico will be the first nation to experience severe Peak Oil impacts. Mexico buys most of its corn and wheat from the U.S. Midwest with sales of crude oil. The government derives 40% of its revenues from the sale of oil. In a few years, the government of Mexico will falter and collapse. Mexico City is located at 7,400 feet above sea level, and a lot of oil is expended in transporting food and water to Mexico City. With rampant unemployment, the masses will commandeer food trucks coming into the city. And water will no longer flow in a city of 20 million. The highways will dangerous and people won't be able to leave, and they will have nowhere to go if they can get out. It's all about Peak Oil, and it will happen here in the U.S. too a few years later. It's all spelled out in scientific and government studies, as reviewed in this report: http://www.peakoilassociates.com/POAnalysis.html