WSJ: “Daily output at Mexico’s biggest oil field tumbled by half a million barrels last year, according to figures released Friday by the Mexican government. The ongoing decline at the Cantarell field could pressure prices on the global oil market, complicate U.S. efforts to diversify its oil imports away from the Middle East, and threaten Mexico’s financial stability. The virtual collapse at Cantarell — the world’s second-biggest oil field in terms of output at the start of last year — is unfolding much faster than projections from Mexico’s state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell’s daily output fell to 1.5 million barrels in December compared to 1.99 million barrels in January, according to figures from the Mexican Energy Ministry.

…In many older oil fields, companies inject gas to keep the pressure in the wells high and the oil flowing. In the case of Cantarell, Mexico injected vast quantities of nitrogen in the past few years. But the gas can only do so much, and using it means the decline in production can be sudden and sharp. In the case of Cantarell, which lies in the shallow waters of the Gulf, experts say that seawater is fast invading the wells.”

Matt Simmons (”Twilight in the Desert”) warns that the same thing is happening to the big old fields in Saudi Arabia.