Yesterday, Mexico celebrated the 70th anniversary of the nationalization of the their oil industry, but the 80th year event may be grim. Although Petroleos Mexicanos (Pemex) produced an average of 3.1 million barrels a day of crude oil last year, the Houston Chronicle reports their proven reserves are now only 9.2 years of crude production. At a ceremony in oil-rich Tabasco, President Felipe Calderon called for more private investment, proclaiming the fate of Pemex the defining issue of his generation: "To transform Pemex is to strengthen Mexico." Pemex doesn't have the technological resources to drill into promising, but ultradeep, fields in the northern Gulf of Mexico, close to U.S. and Cuban waters. Mexico needs these fields to replace declines at Cantarell. Jesus Reyes Heroles, CEO of Pemex also spoke, admitting that Mexico's proven hydrocarbon reserves fell 5.1 percent last year. Reyes Heroles said Pemex replaced 50 percent of proven reserves last year, compared with 41 percent in 2006, but was still short of reaching 100 percent replacement. As is everyone.
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The beauty of government run oil companies.
Lets see, the government steals, I mean nationalizes, the oil companies then asks for private investors when they can no longer make the capital investment to keep them going. Well, I’m sure they wouldn’t seize any new assets once they are in place, now would they.
As is everyone.
I’m certain Exxon-Mobile’s reserves are still at 101% replacement (although that’s an all-time low). They’re even higher with Euro-zone accounting.
Pemex has problems, but they may be fixable. By contrasting Venezuela’s POS-grade PDVSA with Norway’s near world class Statoil, they may find a happy middle ground between efficiency and corruption. Brazil’s national oil firm is probably the best target.
More:
http://peakopps.blogspot.com/2008/03/mexican-oil-exports-start-saying-adios.html