While much is said of Mexico’s efforts to develop its deepwater potential, state oil company Pemex is struggling with a more pressing priority: increasing production at new fields in the mid-term. Crude production in the country’s prolific Cantarell and Ku-Maloob-Zaap fields is continuing to decline, and new production from the still largely unexplored deepwater blocks won’t be forthcoming for several years. If Pemex cannot meet ambitious targets at the shallow water and onshore fields in the short term (and recent history suggests it will not), Mexico will face a revenue crunch that will likely put its deepwater potential further beyond reach.

In March, the Energy Ministry and Pemex published a forecast that puts renewed emphasis on developing onshore and shallow water fields in the near term. According to the forecast, crude production from existing fields will fall by 1.8 million barrels per day by 2021, with Cantarell accounting for 1 MMbbl/d of that decrease and Ku-Maloob-Zaap accounting for 295,000 bbl/d. Deepwater production is projected to ramp up toward the end of that period, contributing 500,000 bbl/d by 2021 after starting at a meager 19,000 bbl/d in 2014. Pemex is optimistic that its Chicontepec field and southeast marine basin will help reverse declining production even sooner, in the mid-term churning out some 600,000 bbl/d and 700,000 bbl/d, respectively.

Pemex’s faith in Chicontepec and the southeast basin is understandable, considering it is familiar with the terrain and some of the challenges the two areas present. Chicontepec is northeast of Mexico City in the states of Puebla, Hidalgo, and Veracruz, where Pemex already has production equipment in place. And the southeast marine basin is in shallow water and is already home to the prolific Campeche sound.

To its credit, Pemex is moving ahead with the projects by contracting out drilling and other development work at a rapid clip. In fact, contractors may not be able to keep up with Pemex’s demand. But its problems could snowball; declines at Cantarell and Ku-Maloob-Zaap will likely make it difficult to invest heavily in Chicontepec and the southeast basin, which in turn could slow the pace of deepwater development. As a result, the government would suffer from reduced oil revenues, forcing it to reduce fuel subsidies and even social programs. In turn, that could lead to more political opposition and uncertainty in a country that continues to feel the aftermath of the controversial 2006 presidential election.