Oil Production in Mexico Still Profitable Despite Falling Prices - Pemex

Oil extraction in Mexico remains profitable despite the sharp global drop in prices, the head of Mexico’s state-run Pemex company said.

MEXICO CITY (Sputnik) – Last week, news emerged that Pemex was losing $0.93 for each barrel sold as Mexican oil prices in the international market have dipped to $22.07 a barrel at $23-per-barrel production costs.

"For Pemex, the average cost of production at the fields already established or explored is slightly less than $10 per barrel," Emilio Lozoya told the Radio Formula station in a phone interview late Monday.

Lozoya estimated $22-23 per barrel extraction costs at new deposits where infrastructure was yet to be developed, forecasting a difficult year for the firm.

He observed that the implementation of the latest nuclear deal with Iran, anticipated to add to the oversupply of oil on the global market after anti-Iran sanctions were lifted over the weekend, would also affect prices.

Lozoya forecast a leveling off between supply and demand in oil, citing continued energy needs in the emerging Indian and Chinese markets.

The country's authorities declared last month that national oil revenues have gone down by 38 percent year-on-year in the last 10 months.