Pemex sees output flat to 2007

MEXICO CITY (Reuters) - Mexican state oil monopoly Pemex sees crude oil production staying roughly flat this year and next, Chief Financial Officer Juan Jose Suarez said Friday.

Suarez said he saw Pemex's 2007 crude oil output averaging 3.45 million barrels per day, up only a whisker from estimated average production of 3.42 million bpd this year.

"It should be around 3.45 million," he told the Reuters Latin America Investment Summit in Mexico City.

Pemex, one of the top three suppliers of crude oil to the United States, saw its oil production dip to 3.33 million bpd in 2005, partly due to a rash of hurricanes that disrupted operations.

The company had initially hoped to ramp up output to 3.8 million bpd in 2006, but has scaled back expectations as it faces declining output from its huge but aging Cantarell oil field from this year.

Pemex was operating a record 5,800 wells in 2005.

Mexico's crude oil mix, made up mainly of heavy-grade Maya oil, is selling at record levels above $50 per barrel as global oil markets soar, and the country has enjoyed huge oil windfalls in the past couple of years.

However, most of the windfall profits are kept by the government, which gets a third of its fiscal revenues from Pemex, and Pemex has not seen a significant rise in investment.

Output will be hampered in the coming years by higher extraction costs as Pemex moves to much more technically challenging production wells, having for years enjoyed low extraction costs from freely gushing oil at Cantarell.