Reply #5: An R/P of 7 is just part of the picture.

[GliderGuider]

They're saying that they have enough proved reserves for 7 years of production at current rates. While it's worrying that they're saying this out loud, there are 3 other things to keep in mind.

1. They may add to their reserves. They did announce a new find, Noxal, with great fanfare last year. Unfortunately, they have made such announcements in the past only to restate their importance after further testing. Even if Noxal proves out, it will take 5 to 10 years to bring it on line. They have little in the bag beyond that. They are down to Hail Mary plays at this point.

2. As production rates decline over time, the R/P will stretch out, meaning less oil will last longer as it is produced slower.

But the biggie is:

3. Net exports are going to decline much faster than production. The Mexican administration will probably have to try and stave off internal revolt by keeping their rising domestic demand supplied first. I expect to see Mexican oil exports go to 0 within 3 years. For the USA that is a big deal.