The Mexican oil market represents one of the country's major export revenue generators, with oil revenues generating over 10% of Mexico's export earnings.
However, production levels are being affected by depleting oil field reserves. In addition, the contribution of the natural gas to the country's energy sector is also relatively low.
Exploratory wells were first drilled in Mexico in 1869, but oil was not discovered until the turn of the twentieth century. By 1901, commercial production of crude oil in Mexico had begun.
Mexico represents one of the largest producers of crude oil in the world with approximately 10.4 billion barrels of proven oil reserves in 2011.
Mexico's crude oil consumption totals 2.099 million barrels per day is in comparison to Mexico's output of 2.576 million barrels per day which has resulted in a lucrative export trade for the country. However, output is forecast to decline as a result of the depleting oil fields. Since 2004, crude oil production has been reducing.
In 2008, the country's production peaked at 3.2 million barrels a day, according to the US Energy Information Administration. Last year, it didn't even produce 3 million a day.
The reason: aging oil fields and years of underinvestment. Industry experts say Mexico could revive production if it allowed more investment from international oil companies. But under current policy, EIA says Mexico will have to start importing oil by 2020.
The bottom line is that Mexico may need up to $35 billion to develop its oil and gas reserves, however, without private and foreign investment that could prove to be impossible.
For more information on the Mexican oil market, see the latest research: Mexican Oil Market
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