Mexico may have to import oil as Carlos Slim becomes the richest man in the world

The national oil company created after the 1938 seizure, Pemex, is entering a period of turmoil. Oil production in its aging fields is sagging so rapidly that Mexico, long one of the world’s top oil–exporting countries, could begin importing oil within the decade.

Mexico is among the three leading foreign suppliers of oil to the United States, along with Canada and Saudi Arabia. Mexican barrels can be replaced, but at a cost. It means greater American dependence on unfriendly countries like Venezuela, unstable countries like Nigeria and Iraq, and on the oil sands of Canada, an environmentally destructive form of oil production.

“As you lose Mexican oil, you lose a critical supply,” said Jeremy M. Martin, director of the energy program at the Institute of the Americas at the University of California, San Diego. “It’s not just about energy security but national security, because our neighbor’s economic and political well–being is largely linked to its capacity to produce and export oil.”

Mexico probably still has plenty of oil, especially beneath the deep waters of the Gulf of Mexico, but Pemex lacks the technology and know–how to get it out. Inviting foreign companies into the country to help is one of the touchiest propositions in Mexican politics.

As the Mexican government struggles to find a way forward, production keeps falling.

The basic problem is simply that Mexico’s readily accessible oil is used up — pretty much the same thing that happened to the United States when production began falling in the 1970s. Output from Mexico’s giant Cantarell field, in shallow waters near the eastern shore, has plunged by 50 percent in recent years. Output at the country’s other large field is expected to begin falling in the next year or two.

Historically, oil has supplied 30 to 40 percent of the Mexican government’s revenue. Confronting a potential calamity, President Felipe Calderón has pushed through the strongest reforms he can defend politically, in hopes of attracting foreign investment. But he dare not do anything that would appear to reverse the 1938 nationalization. Even the modest reforms he has managed to pass are being challenged in court.

Officially, the government is optimistic that Mexico can reverse its decline as an oil–producing nation. But its efforts so far have yielded more rhetoric than oil.

Mexican telecom giant Carlos Slim has topped Forbes magazine’s billionaire’s list – the first time since 1994 that an American has not led the rankings.

Mr Slim’s fortune rose by $18.5bn (£12.4bn) last year to $53.5bn.

That beat Microsoft founder Bill Gates ($53bn) into second place, with US investor Warren Buffet ($43bn) third.

In 2009 332 names left the list after a tough year, but the total number of billionaires on this year’s list rose from 793 to 1,011, Forbes said.

The year’s biggest gainer, Brazilian mining tycoon Eike Batista, broke into the top 10 for the first time.

He came in at number seven, having boosting his wealth by $19.5bn to $27bn.


well hes not on top by much but he is top..anyone remember that video last year of the lady in mexico claiming slim was a reptile? to see the link again if anyone has it..and mexico running out of onshore oil..they will be dependent on somebody now..


~ by seeker401 on March 13, 2010.

7 Responses to “Mexico may have to import oil as Carlos Slim becomes the richest man in the world”

  1. “Mexico probably still has plenty of oil, especially beneath the deep waters of the Gulf of Mexico, but Pemex lacks the technology and know–how to get it out.”

    So Pemex has been in the oil business since 1938 and doesn’t know how to get oil out of the Gulf of Mexico?

    No, this should read – Pemex wants the U.S. taxpayers to pay for them to get the oil out of the Gulf of Mexico. Can it be anymore obvious?

    • yeah you hit the nail on the head intrigued..great perception..of course they know how to get it out..they just dont want to pay..

    • Do you really think that Pemex is expecting the U.S government to finance this project! If anything it would be private investors not the taxpayers! You should really do some research before posting ignorant comments.

      • private investors you think?

        what about public companies supported by friendly usa regulations?


        “The focus of the company in the USA centred on debt reduction, the pursuit of the acquisition of producing assets in the Gulf of Mexico and the high grading and de-risking of exploration prospects in readiness for the commencement of drilling in late March/early April,” the company said.


        Anadarko Petroleum Corp (APC.N) plans to boost spending as much as 22 percent this year as the oil and natural gas company develops its high-risk deepwater discoveries and U.S. shale gas acreage.

        Anadarko has had a string of high-profile deepwater oil discoveries, in areas including the Gulf of Mexico and offshore West Africa.


        A new ultra-deepwater drillship that Chevron USA Inc (CVX.N) is deploying in the U.S. Gulf of Mexico could help develop the Jack, St. Malo and Buckskin discoveries, Chevron said Thursday.

        The Mexican government seeks to encourage foreign participation in key sectors of the domestic economy, such as energy, infrastructure, housing and tourism. These sectors represent an estimated investment of US$56 billion.

        During the recent Mexico 2010 Infrastructure Conference, held in Madrid, Spain, there were some 100 infrastructure projects that the Mexican government will offer for bid this year.

        The energy sector stands out, with an amount of US$19.1 billion, corresponding to an ambitious Petroleos Mexicanos (Pemex), the state-owned oil company, investment program.

        Pemex, the Mexican national oil company, has done such a poor job in developing new capacity that its production has declined from more than 3.8 million barrels per day in 2004 to just under 3 million per day in October 2009, the latest month for which figures are available.

        Sempra Energy, owner of the largest U.S. natural-gas utility, agreed to buy El Paso Corp.’s Mexican pipeline assets for $300 million in a bet on rising fuel- shipping demand in Sonora state.

        The purchase includes the seven-mile (11-kilometer) Agua Prieta pipeline and the Naco compressor station that ship gas from the U.S. border to a Mexican power plant, San Diego-based Sempra said today in a statement. Sempra also is getting El Paso’s 50 percent stake in a joint venture with Mexico’s state oil company that has two gas pipelines and a propane system.

        “This acquisition expands our scale and geographic footprint in one of the strongest growth regions in Mexico, while providing entry into the emerging propane pipeline business,” said George S. Liparidis, chief executive officer of Sempra’s pipeline unit.


  3. If Mexico alowed foreign investor to supply pemex with the nesesary technology to extract the oil; Mexico will have to buy back its own oil from the U.S. America would be the only one to profit and it will put Mexico at the bottom of the food chain. Pemex and the Mexican government are being verry careful not to loose everything they have gained by nationalizing the oil.

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