Mexican News
The latest news from and about Mexican issues.Saturday, June 13, 2009
Calderon: Pemex Must Be Freed From “Ideological” Prejudice
Herald Tribune, June 12, 2009 - “Mexican President Felipe Calderon said state oil company Petroleos Mexicanos must be freed from political and ideological “prejudice” and from interests that have prevented it from remaining in the vanguard in terms of technology and investment. During the inauguration of the 2009 Mexican Petroleum Congress in the eastern state of Veracruz, Calderon said he will try to make sure Mexico once again becomes a world “oil power” because of that industry’s importance in spurring the country’s “growth and development.” Speaking to representatives of more than 100 oil companies from 17 countries, he said the recent decline in the Mexican state oil company’s output and the strides made by its counterparts in other parts of the world have left Pemex in a position of relative backwardness. Compared with other state-run firms, Pemex is the third-largest crude oil producer, the 11th biggest integrated oil and gas company and in 12th place in terms of proven reserves. “Today, thanks to the reform of Pemex (approved in October 2008), we have the chance to improve the company’s exploration and production capacity,” the president said. Calderon last year sought to push a controversial plan through Congress to overhaul Pemex, including allowing the cash-strapped company to take on private oil firms as full partners in the exploration and drilling of new deepwater deposits in the Gulf of Mexico.” Read More.
Wednesday, June 03, 2009
Are Monopolies Holding Mexico Back?
The New York Times, June 3, 2009 - “ When Nafta took effect on Jan. 1, 1994, there was optimism in Mexico that the free trade accord, along with a raft of other market-based measures, would usher in growth and chip away at the country’s social inequalities. That never happened. Average annual growth in the 15 years of the North American Free Trade Agreement has been about 3 percent. What went wrong with those forecasts? For several years now, economists and policy-makers inside and outside the country have been trying to puzzle that out. Now the World Bank has published a book, “No Growth without Equity?,” that summarizes the theories explaining Mexico’s mediocre performance. The book argues that special interest groups, particularly in business and labor, have managed to block changes that would make the economy more efficient and productive in an attempt to preserve privileges built up over decades under Mexico’s closed economy and one-party state. Most important, those groups have frustrated attempts to introduce competition.Surprisingly, Mexico’s transition from a one-party state to a fractious democracy has done little to change this. Powerful interests have been successful at controlling weak government institutions and co-opting political parties.” Read More.
Monday, June 01, 2009
Mexican Factories May Cut Fewer Jobs Than in 2001: Week Ahead
Bloomberg, June 1, 2009 - “Export companies in Mexico such as auto-parts maker Delphi Corp. are firing fewer workers this year than during a 2001 recession on optimism that demand will recover from a worldwide economic slump by next year. Delphi, the former unit of General Motors Corp., shuts its 48 Mexican plants one week a month to avoid layoffs as demand for car parts declines. Other companies also are using partial closings and furloughs, which may limit job cuts at export factories this year to about 7 percent of their total workforce, said Cesar Castro, president of the National Council for Maquiladora and Export Manufacturing Industry. “It’s a way to avoid as much as possible the firing of qualified workers, who have a lot of training and are specialized,” said Castro, who manages a Mexican factory for Jabil Circuit Inc. “The companies don’t want to lose them.” Limiting layoffs may help prop up consumer spending as the economy heads for a 5.5 percent contraction this year, according to the Mexican government’s forecast. The government has announced 2 billion pesos ($151.7 million) of direct support to manufacturers to protect jobs amid the global recession that has sapped demand for factory goods, particularly in the U.S., the destination for 80 percent of Mexico’s exports.” Read More.
Sunday, May 24, 2009
Value of Mexico’s Crude Exports Down 60 Percent
Latin American Herald Tribune, May 24, 2009 - “Mexican state oil company Pemex said that in the first four months of the year the value of its crude exports totaled $6.14 billion, down 60.4 percent compared to the same period of 2008. According to operating results announced in a press release on Thursday, Pemex exported an average of 1.25 million barrels of crude per day in that period, off 15.3 percent from the average exported in the first four months of 2008. The average price of Mexico’s export crude mix was $40.80 per barrel for the first four months of the year, 52.8 percent less than the average price in January-April 2008, prior to the onset of the global economic crisis. For the same periods in question, Pemex produced 2.66 million barrels per day this year, a decrease of 6.89 percent from the 2.85 million barrels of output in 2008. Mexico is facing declining production at its main oil fields even as domestic demand for oil-derived products continues to increase. Read More.
Wednesday, May 20, 2009
Pemex board headed by ‘supercouncillors’
Penn Energy, May 19, 2009 - “Petroleos Mexicanos (Pemex) inaugurated its new board of directors, adding four newly created positions and raising the number of its members to 15 from 11 in line with national oil policy reforms enacted last year.
The four new positions, referred to as supercouncillors, have been filled by Fluvio Ruiz Alarcon, Rogelio Gasca Neri, Hector Moreira Rodriguez, and Jose Fortunato Alvarez Enriquez. The additions are in response to a national energy reform bill passed in 2008 by Mexico’s congress to step up Pemex’s oil production without surrendering public ownership of the state firm. According to a joint statement by Pemex and the Secretaria de Energia (Sener), the role of the new board members is to “guide Pemex in accordance with the best corporate practices of the oil industry.” Any initiatives must win at least two votes from the four new supercouncillors, all of them chosen for their professional knowledge in the oil industry. Ruiz Alarcon, who served as an advisor to leftist Partido de la Revolucion Democratica (PRD) during the energy reform debates of 2008, has degrees in physics and in oil production engineering.Gasca Neri who holds a degree in chemical engineering and extraction industries and served as Mexico’s deputy planning and budget secretary, deputy spending minister, deputy infrastructure minister, and chief executive of state power company CFE Moreira Rodriguez, a former member of the Pemex board, also served as Mexico’s deputy hydrocarbons minister and deputy energy planning and technological development minister, and was Mexico’s representative in the 2005 and 2006 OPEC meetings. He holds a degree in chemical sciences and chemical engineering and a doctorate in chemistry. Alvarez Enriquez has a degree in public accounting and was chief of the public administration ministry’s government audit unit; he also served as head of Pemex’s internal control body.” Read More.
Wednesday, May 13, 2009
The Crisis Came. Mexico Didn’t Fail. Surprised?
The New York Times, May 8, 2009 - “Just for argument’s sake, let’s compare Mexico’s management of the swine flu epidemic that broke out here last month with China’s handling of SARS in 2002. The Chinese initially tried to deny there was an outbreak, were slow to combat its spread and resisted cooperation with foreign investigators. By the time SARS was brought under control, more than 700 people had died. Mexico’s conduct has been different. The authorities may have been slow to identify the threat, but once they did, they quickly notified international health agencies, acted efficiently to prevent the epidemic from mushrooming, and began working closely with the Centers for Disease Control and Prevention in the United States. As of Friday, the death toll was 45. That response flies in the face of recent descriptions of Mexico as a “failed state” that is “on the verge of civil war” — phrases that seem a staple on American talk radio, cable television and political blogs. Apocalyptic language like that is based on the violence of Mexico’s battles with the drug cartels that supply the American market, and with the severity of its economic downturn, which has been complicated by the fact that more than 80 percent of its trade is with the United States. Both trends are indeed playing out, but what they mean for Mexico’s future is far from certain. At any rate, they stand in contrast to a number of fundamental changes that I have seen here over the last month — my first extended stay in this country since a four-year stint as The New York Times bureau chief here ended in July 1990.” Read More
Monday, May 11, 2009
Mexico sees oil bidding in December
Reuters, May 11, 2009 - “Work on new contracts that let private oil companies explore for oil in Mexico is on schedule and bids for the first deals should be received by December, a senior executive of state oil company Pemex said on Friday. Mexican law bans private participation in the oil industry but Pemex is keen to bring in international oil companies to help boost falling oil production, which has dipped to its lowest level since 1995. “We’re on track to have a model of the contract ready by the end of June and then we will start having consultations” with industry, Pemex exploration and production chief Carlos Morales told the Reuters Latin American Investment Summit. International oil companies have been quietly watching developments in Mexico due the widely held belief that unexplored areas, such as the deeper waters of the Gulf of Mexico, hold billions of barrels of oil. Private oil companies have been locked out of Mexico since 1938 when the country nationalized the industry. Many Mexicans still oppose allowing foreign firms back in, even under limited terms permitted by reforms enacted last year.” Read More.
Friday, May 08, 2009
With Easy Oil Gone, Pemex Sobers Up
Forbes, May 8, 2009 - “After coasting through the ‘80s and ‘90s, the Mexican national oil company is playing catch up to develop the ability to operate in deep water. Thirty years ago, a fisherman saw an oil slick in the shallow waters off the coast of Mexico. The discovery would lead to one of the largest crude reservoirs in the world and a party keg for an impoverished country. Production at Cantarell, as it was named after the fisherman, peaked at more than 2 million barrels of oil a day in 2004 and then began to fall sharply. It is expected to bottom out in three or four years, perhaps between 300,000 and 600,000 barrels a day. Cantarell’s decline has marked the end of an era of easy oil for Petróleos Mexicanos, or Pemex, as the state oil giant is called. Needless to say, Pemex needs to stabilize production, which today stands at 2.7 million barrels of oil a day, down from 3.3 million at its peak. The company, however, is realizing how soft its hands became by coasting through the late 1980s and 1990s, not investing enough in exploration, particularly in deep waters, where the future growth of Pemex rests. “That was not the correct strategy,” Carlos Morales Gil, Pemex’s director of exploration and production, said during a speech here Wednesday at the Offshore Technology Conference. “We cannot stay dependent on one single reservoir anymore, even if it’s very good. That is something that we have to keep in mind every day that we wake up.” It’s impossible not to.” Read More.
Thursday, April 30, 2009
Mexico Limits Public Services as Flu Alerts Are Increased
The New York Times, April 30, 2009 - “As the swine flu virus appeared in new locations as far apart as Peru and Switzerland on Thursday, Mexicans braced for a national shutdown of offices, restaurants, schools and even the stands of soccer stadiums in an attempt to slow the spread of the disease. In nationally televised speech Wednesday night, Mexican President Felipe Calderón said that, as of Friday, many public services would be closed through Tuesday, encompassing a long holiday weekend. Most government offices and many private businesses will be ordered closed, restaurants, schools and museums will remain shuttered, and spectators will be barred from all professional soccer matches.Churches are expected to be nearly empty on Sunday. Officials in Asia and Europe also scrambled to confront the sickness, but Hong Kong’s chief executive, Donald Tsang, said t hat “pandemic flu will continue to spread and Hong Kong is very likely to be affected.”Senior European health officials prepared for emergency talks Thursday in Luxembourg to mold their own response, and governments in Asia stepped up preparations for a potential pandemic.” Read More.
Friday, April 24, 2009
US Ex-Im Bank okays $900 million loan to Pemex
Reuters, April 24, 2009 - “The U.S. Export-Import Bank on Thursday said it had approved $900 million in direct long-term loans for Mexico’s state-owned oil company Pemex to import more than $1 billion worth of U.S. goods and services to help develop oil and natural gas projects. The bank said it authorized a $600 million, 10-year direct loan to Pemex to support the purchase of U.S. exports to be used in projects of PEP (formerly known as the New Pidregas Projects), which consist of 18 natural gas and crude oil exploration sites located on land and offshore at the Bay of Campeche on the northern coast of the Yucatan. It also authorized a $300 million, 10-year direct loan program to support U.S. exports for the Cantarell offshore oil fields located in the Bay of Campeche.” Read More.
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