Crystal Ball
Bloomberg today...
Reserves plummet, leaving Pemex 'critical'
THOMAS BLACK
Bloomberg News
Petroleos Mexicanos, the third-biggest oil supplier to the United States, said its reserves of oil and natural gas have dropped by half since 2002 because of a lack of investment, leaving the company in a "critical" situation.
Jesus Reyes Heroles, the chief executive officer of Pemex, said yesterday the Mexican government, Congress, workers and society need to come up with a new model for operating the company, which is state-owned. Mexican President Felipe Calderon, meanwhile, called for shoring up Pemex while avoiding privatization.
Marisol Rueda in Latin Trade, July 2005...
Slippery Slope
Despite high oil prices, lack of investment at state-run Pemex means Mexico could soon become a crude importer.
After being a virtual gusher of cash for Mexico for many decades, state-run oil company Petróleos Mexicanos (Pemex) seems to be on the verge of drilling a dry hole. The company faces serious challenges in terms of infrastructure and a critical financial situation that, among other things, keeps it from making the exploration investments it needs to counteract a gradual production decline at its existing deposits. If the situation remains unchecked, in a decade Mexico could become an importer of crude oil, warns Pemex General Director Luis RamÃrez Corzo.
For now, the two main problems at Pemex are high levels of debt and the decline of its known oil reserves, according to oil analysts. More money is needed, clearly, but it's less clear from where that cash will come - outside or inside Pemex. New private financing, although not voting shares, is one route, although allowing Pemex to keep more of the cash it generates is another, less politically painful choice, and the more likely path, according to Pemex observers.
Reserves plummet, leaving Pemex 'critical'
THOMAS BLACK
Bloomberg News
Petroleos Mexicanos, the third-biggest oil supplier to the United States, said its reserves of oil and natural gas have dropped by half since 2002 because of a lack of investment, leaving the company in a "critical" situation.
Jesus Reyes Heroles, the chief executive officer of Pemex, said yesterday the Mexican government, Congress, workers and society need to come up with a new model for operating the company, which is state-owned. Mexican President Felipe Calderon, meanwhile, called for shoring up Pemex while avoiding privatization.
Marisol Rueda in Latin Trade, July 2005...
Slippery Slope
Despite high oil prices, lack of investment at state-run Pemex means Mexico could soon become a crude importer.
After being a virtual gusher of cash for Mexico for many decades, state-run oil company Petróleos Mexicanos (Pemex) seems to be on the verge of drilling a dry hole. The company faces serious challenges in terms of infrastructure and a critical financial situation that, among other things, keeps it from making the exploration investments it needs to counteract a gradual production decline at its existing deposits. If the situation remains unchecked, in a decade Mexico could become an importer of crude oil, warns Pemex General Director Luis RamÃrez Corzo.
For now, the two main problems at Pemex are high levels of debt and the decline of its known oil reserves, according to oil analysts. More money is needed, clearly, but it's less clear from where that cash will come - outside or inside Pemex. New private financing, although not voting shares, is one route, although allowing Pemex to keep more of the cash it generates is another, less politically painful choice, and the more likely path, according to Pemex observers.
posted by Greg Brown at 10:12 AM
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