MEXICAN OFFICIALS HINT AT THE UNMENTIONABLE

They're discussing the unmentionable south of the Rio Grande.

On Nov. 1, they traveled north to discuss it in Houston.

In a keynote speech at a Center for Business Intelligence conference, Mexican Sen. Juan Jose Rodriguez Prats said judicial and perhaps constitutional changes might be in order to give private companies enlarged involvement in energy development.

It wasn't clear that he meant oil development, which since 1938 has been the sole province of the state. But mention of constitutional change suggests that he did.

This is a sensitive subject in Mexico. Much of the population views the oil resource as national patrimony and state control of it as essential to independence.

So state-owned Petroleos Mexicanos SA runs the oil and gas industry. Reluctantly, the government has opened petrochemical manufacture and parts of the gas business to private investment. But oil belongs to the state.

There's a lot of it. The government estimates reserves at 28.3 billion bbl, second largest in the Western Hemisphere to Venezuela. Production is normally 3-3.5 million b/d, although Mexico at times limits output to help the Organization of Petroleum Exporting Countries-to which it does not belong-support the price of crude. The country also produces 1.3 tcf/year of natural gas from reserves of 30.4 tcf.

With investment from abroad and less bureaucracy in charge of things, Mexico could produce more oil and create more wealth than it does now. Nationalism wrapped up in state control of petroleum stands in the way.

While campaigning for the presidency he won in July 2000, reformist Vicente Fox promised to privatize the oil industry. He has since had to backtrack, promising instead to streamline Pemex.

But Rodriguez revived the theme in Houston, pointing out that Mexico can't fund all the projects needed to fully develop its energy resources. Like Fox, he belongs to the National Action Party.

"It's not necessary or desirable to fund every energy program from the national purse," he said (OGJ Online, Nov. 1, 2001).

In most contexts, this would be a statement of the self-evident. For Mexico, however, the economic implications are huge, the political risks great.

The country is a long way from the type of reform it needs to make in order to achieve the full economic potential of its petroleum resource.

But at least they're talking about it.

Related Articles

ConocoPhillips plans further capex reduction for deepwater exploration

07/27/2015 ConocoPhillips reported plans to further reduce its capital expenditures for deepwater exploration, with the "most significant reductions"...

Michigan DEQ report urges ban of heavy oils in Mackinac Straits pipeline

07/27/2015 Michigan's Department of Environmental Quality's Petroleum Pipeline Task Force issued a report that recommended that heavy crude and oil sands be k...

EPA initiatives give new meaning to political gridlock

07/24/2015

Bad energy policy has one positive attribute: a strong tendency for mistakes to devour themselves.

Contract let for Chinese grassroots petrochemical project

07/23/2015 Ningxia Baota Chemical Fiber Co. Ltd. (NBCF), a subsidiary of privatized Ningxia Baota Petrochemical Group Co. Ltd. (NBPG), has let a contract to H...

Rig counts are up where plans focus on the long term

07/17/2015

Rig counts plummet except where they don’t.

Cost retrospection

07/17/2015 Warning about the cost of regulation is easier than proving it retrospectively. Individuals or industries know what they spend to function under a ...

S-Oil lets contracts for Onsan refinery, olefins projects

07/16/2015 S-Oil Corp., Seoul, has let a series of contracts to Axens to supply technology for a residue upgrading and capacity expansion project at its 669,0...

Fire hits at LyondellBasell’s Berre petrochemical complex

07/15/2015 An investigation is under way into the cause of a fire and subsequent explosions that occurred on July 14 at LyondellBasell’s Berre petrochemical c...

Total unveils development sites for renamed Papua LNG project

07/13/2015 Total SA and its joint venture partners Oil Search Ltd. and InterOil Corp. have announced key infrastructure sites for development of the proposed ...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected