The great Mexican elephant safari by Jeffrey Ball @FortuneMagazine August 15, 2014, 3:12 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Workers on Pemex’s Yùum K’ak’ Náab floating oil refinery.Photograph by Jeffrey Ball Pemex’s mainstay oil field in the Gulf is drying up. What will the company do to reverse declining production? Until a few years ago, Mexico enjoyed easy oil. It got most of its petroleum at any given time from just one or two major groups of fields — what industry insiders call “elephants.” Pemex has gotten exceedingly skilled — indeed, legendary in the oil industry — at riding its elephants hard. But it has been far less successful at replacing its elephants once they expire. The mother of all Mexican elephants lies in a shallow part of the Gulf of Mexico called the Bay of Campeche, roughly 65 miles off the oil town of Ciudad del Carmen. Named for the Mexican fisherman who discovered it in 1961, it’s called Cantarell. Out in his boat one day, Rudesindo Cantarell Jimenez saw something shiny floating atop the water. It was oil, which naturally seeped to the surface from brimming subsea formations. Pemex began producing oil at Cantarell in 1979. For more than three decades, that oil powered Mexico’s economy. At its peak, in 2004, Cantarell produced 2.1 million barrels per day — some two-thirds of what then was Mexico’s total output of 3.4 million barrels per day. Over the past decade, though, Cantarell’s production has tanked, falling more than 80%, to just 380,000 barrels per day, according to Mexico’s National Hydrocarbons Commission. With it, Mexico’s total oil output has shrunk 25%, to 2.5 million barrels per day. For a country that relies on selling barrels to bankroll basic services, that’s a scary trend. To anyone who thinks producing oil is as easy as punching a hole in a rock and watching the gusher go, Cantarell is an unforgettable reality check. It’s a smoky, smelly testament to the sweat and grit that Pemex has poured into trying to keep its aging elephant alive. Seen on a sweltering morning from a helicopter whirring 1,600 feet above the Gulf, the field resembled something out of Blade Runner. No mere offshore rig, it’s a seaborne petroleum factory. Dozens of structures spanned the ocean: tan, unmanned well platforms; processing facilities topped by orange flares emanating black smoke; and, everywhere, ships. Adjacent to Cantarell is a group of other shallow-water fields, known by the Mayan names Ku-Maloob-Zaap, or, within Pemex, KMZ. Pemex developed the first one, Ku, around the same time it tapped Cantarell. Both Ku and Cantarell contain oil that flows relatively easily. Later, as Ku and Cantarell were declining, Pemex developed Maloob and Zaap, which contain heavier, and thus hard to handle, oil. How much harder to handle was evident when the helicopter touched down onto a massive oil-processing vessel anchored above the fields. The ship, essentially a floating oil refinery, is called Yùum K’ak’ Náab — Mayan for Lord of the Sea. Pemex officials aboard the vessel boasted that it’s longer than either the Kukulcan Pyramid at Chichen Itza or the Eiffel Tower is tall. KMZ produces about 865,000 barrels of oil per day — more than twice the current output of the gasping Cantarell. KMZ also produces a lot of natural gas. But it consumes more than twice as much gas as it produces. That’s partly because Pemex must inject vast quantities of gas into KMZ to help push the remaining oil up to the surface. Said Joram Carriles, a KMZ operations manager: “It’s a dying field.” Still more of KMZ’s gas is consumed by boilers on the Lord of the Sea. Steam from those boilers heat the heavy oil from 55 degrees Celsius, the temperature at which it comes out of the wells, to 100 degrees Celsius. Like old grease, the fresh crude is easier to handle and to pump after it’s warmed. On that morning, the Lord of the Sea was pumping it into the Astro Arcturis, a massive black-and-red-hulled tanker that was preparing to take the oil where Mexico sends much of the crude it exports: to coastal refineries on the north end of the Gulf, in the U.S. Read The drama of Mexico’s Black Gold from the Sept. 1, 2014 issue.