Mexican News
The latest news from and about Mexican issues.Tuesday, March 09, 2010
Mexico Oil Politics Keeps Riches Just Out of Reach
The New York Times, March 9, 2010 - “To the Mexican people, one of the great achievements in their history was the day their president kicked out foreign oil companies in 1938. Thus, they celebrate March 18 as a civic holiday. Yet today, that 72-year-old act has put Mexico in a straitjacket, one that threatens both the welfare of the country and the oil supply of the United States. 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.” Read More.
Saturday, March 06, 2010
Mexican Government Waters Down Oil Reforms
Energy Tribune, March 5, 2010 - “The Mexican government has inked an agreement with state-run oil firm Petrpleos Mexicanos (Pemex) to revise rules allowing the firm to award cash-based incentive contracts to private overseas oil companies. The deal marks yet another blow to incumbent President Felipe Calderon’s attempts to liberalise Mexico’s energy sector. Further watering down of the reforms is likely to set back Pemex’s efforts to take on the more ambitious exploration projects which have been cited as imperative in the bid to stem Mexico’s falling oil production rates. News of the agreement comes just as legislators from the Partido Revolucionario Institucional (PRI) have threatened to launch additional legal challenges against energy sector reforms introduced back in 2008 that sought to give Pemex greater financial autonomy from the state and the ability to hire private overseas firms to assist in exploration and development. The 2008 reforms were part of Calderon’s push to open up space for foreign direct investment in the state-monopolised energy sector.” Read More.
Sunday, January 31, 2010
Mexico - President Felipe Calderón Meets with Executives from Global Firms
Israia, January 31, 2010 - “Earlier today, during the Annual Meeting 2010 of the World Economic Forum, Mexican President Felipe Calderón met with the leaders of various global firms. During these meetings, President Calderón explained the competitive advantages that make Mexico an attractive destination for productive investment and job creation. He said that after many years, Mexico is once again one of investors’ ten favorite studies, according to a recent study by AT Kearney. He invited businessmen to invest in Mexico and take advantage of its geostrategic position, which links it to the world’s largest market and the economies of Asia, Europe, Africa and Latin America, as well as Mexico’s increase in competitiveness, which has yielded lower manufacturing costs than those observed in countries such as Brazil, China and India. President Calderón talked to President and Director General of Siemens AG, Peter Löscher, whom he congratulated on his firm’s decision to transfer the production of switches to Mexico, which represents an initial investment of over million dollars in addition to the creation of a thousand new jobs.” Read More.
Mexico - President Felipe Calderón Meets with Executives from Global Firms
Israia, January 31, 2010 - “Earlier today, during the Annual Meeting 2010 of the World Economic Forum, Mexican President Felipe Calderón met with the leaders of various global firms. During these meetings, President Calderón explained the competitive advantages that make Mexico an attractive destination for productive investment and job creation. He said that after many years, Mexico is once again one of investors’ ten favorite studies, according to a recent study by AT Kearney. He invited businessmen to invest in Mexico and take advantage of its geostrategic position, which links it to the world’s largest market and the economies of Asia, Europe, Africa and Latin America, as well as Mexico’s increase in competitiveness, which has yielded lower manufacturing costs than those observed in countries such as Brazil, China and India. President Calderón talked to President and Director General of Siemens AG, Peter Löscher, whom he congratulated on his firm’s decision to transfer the production of switches to Mexico, which represents an initial investment of over million dollars in addition to the creation of a thousand new jobs.” Read More.
Monday, January 25, 2010
Some Strange Bedfellows in This Year’s Mexican Elections
Mexidata, January 25, 2010 - “For the past six years or so, the most irreconcilable enemies in Mexican politics have been the National Action Party (PAN) and the Party of the Democratic Revolution (PRD). Ideology explains much of the enmity, with the right-wing positions of the PAN in obvious conflict with those of the leftist PRD on a range of issues, from oil reform to same-sex marriage. Specific events have also played a big role, notably Felipe Calderón’s narrow win over Andrés Manuel López Obrador in the 2006 presidential election, and the latter’s refusal to recognize it. And the gap has been reinforced by different styles and leading characters, best exemplified by the populist rhetoric of López Obrador versus the egg-headed calm of President Calderón. Against that backdrop, one piece of recent news is somewhat shocking: PAN and PRD leaders have announced a plan to unite behind a single, still-to-be-determined candidate (though he or she will be from the left) in the upcoming governor’s race in Hidalgo. Similar arrangements were to follow in Puebla, Oaxaca, Durango and other states where the PRI’s rule is ironclad.” Read More.
Thursday, December 10, 2009
Did Nafta Actually Help Mexico?
The New York Times, December 10, 2009 - “Who benefited from the North American Free Trade Agreement? Given the ongoing decline in American manufacturing jobs, many people assume the winner in the accord must have been Mexico.Unions and a portion of the Democratic Party have argued that the accord helped push American jobs south of the border to Mexico, where companies can take advantage of low wages and lax regulation. When the issue emerged again last year during the Democratic primary, the benefits to Mexico were never questioned. But a study released Wednesday by the Carnegie Endowment for International Peace finds that Mexico has fared poorly under the accord. “After 15 years, it seems clear that Nafta’s promise of broad-based dynamic growth did not come true in Mexico,” write the study’s authors, Eduardo Zepeda of the Carnegie Endowment and Timothy A. Wise and Kevin P. Gallagher of the Global Development and Environment Institute at Tufts. In one key way, Nafta did deliver as expected: Exports and foreign direct investment tripled from the early 1990s as Mexico became a leading supplier of cars, electronics and a broad variety of industrial parts to the United States. Productivity in Mexican manufacturing rose 80 percent. But annual economic growth averaged only 1.6 percent per capita between 1992 and 2007 — low even by Mexican standards until the 1980s.” Read More.
Monday, November 09, 2009
Calderon Says Job Creation Climbing, Signals Recovery
Bloomberg, November 5, 2009 - “Mexican President Felipe Calderon said employment rose for a fifth month in October, signaling the end of the economy’s biggest contraction since the Great Depression. “Today, we have clear signs of an economic recovery,” Calderon, 47, said at the Bloomberg Economic Forum in Mexico City. “That means the end of the credit contraction and the recession in our country.” The net number of formal jobs in Latin America’s second- largest economy climbed 80,000 from September, Calderon said. The government expects growth of 3 percent in 2010 following a 10.3 percent contraction in the second quarter, the world’s steepest decline after Russia, as exports and tourism revenue sank and spreading drug violence curbed investment. The seizure of credit markets a year ago interrupted Mexico’s longest stretch of economic growth in more than a decade. Government dollar bonds posted their biggest decline since January last month as investors speculated the nation’s investment- grade credit rating will be downgraded because of the recession and the government’s difficulty in reining in the budget gap. “ Read More.
Thursday, October 22, 2009
Mexico oil output slide ending: minister
Reuters, October 20, 2009 - “A dramatic slide in Mexico’s oil production has come to an end and it can maintain output at 2.5 million barrels per day for the coming years, Energy Minister Georgina Kessel said on Tuesday. Mexican crude output has plunged by nearly a quarter since peaking in 2004, straining public finances and spurring bond rating agencies to warn the country’s debt could be downgraded. However the government now believes the rate of decline at the giant Cantarell field has slowed and become more predictable."I am convinced this is a reasonable baseline and that we can work with it for the coming years,” Kessel told Reuters in an interview, referring to the 2.5 million bpd level. “I am confident that production at (Cantarell) has been stabilizing and this gives me confidence that we will not be seeing rates of decline that we experienced last year,” she said. The rapid decline in Mexican production and a dearth of promising new fields to offset Cantarell had led to fears the number four supplier of imported crude to the United States will soon be an importer itself.It has also supported oil bulls’ argument that higher prices are necessary to spur investment in new fields to offset the loss of output from decades-old reservoirs. Mexican officials have long argued the rate of decline at Cantarell would eventually slow to more manageable levels, although state oil company Pemex’s forecasts have often been overly optimistic.” Read More.
Saturday, October 10, 2009
Pemex Board to Review $11.1 Billion Chicontepec
Bloomberg, October 9, 2009 - “Petroleos Mexicanos’s board will meet on Oct. 15 to discuss whether the state-owned oil company should continue investing in the $11.1 billion Chicontepec oil project, said board member Fluvio Ruiz Alarcon. Suspending investments at Chicontepec “is a complicated issue, because the investment plan was approved and it’s already in course,” Ruiz Alarcon said. “We’ll need to learn how far the commission’s mandate reaches.” Ruiz Alarcon, who spoke in a telephone interview, was responding to a report today by daily newspaper El Universal that said the nation’s National Hydrocarbons Commission had ordered the onshore project be shut down because of inefficient drilling. Mexico’s Energy Minister and Pemex chairwoman Georgina Kessel and board member Ruiz Alarcon have said Chicontepec needs to be reassessed. Ruiz Alarcon said in May that Pemex is too “optimistic” about the field, where the company pumps about 30,000 barrels a day of oil, below a targeted 40,000 barrels. Mexico needs to reevaluate how to proceed with the project, Juan Carlos Zepeda, head of the country’s Hydrocarbons Commission, said today in a telephone interview. Pemex started Chicontepec without the proper technology, he said. Incentive Contracts The commission will recommend Pemex renegotiate drilling contracts to pay with incentives that depend on results, Zepeda said. The commission’s findings are a recommendation and aren’t mandatory. “Current contracts will continue to be executed,” he said.” Read More.
Wednesday, October 07, 2009
Carstens Confident Mexico to Avoid Ratings Downgrade
Bloomberg, October 7, 2009 - “Mexican Finance Minister Agustin Carstens said he was “comfortable” his country could maintain its current credit rating as the government seeks to raise taxes amid the biggest recession since the 1930s. Carstens said it was premature to seek alternatives to a planned 2 percent tax increase on food and medicine that opposition lawmakers, who form the largest party in the lower house, say will punish the poor. He said he’ll have a better sense of whether the proposed changes will be approved after a congressional committee evaluates them next week. “There is no doubt that there are some modifications that can be made,” Carstens said in an interview in Istanbul, where he is attending International Monetary Fund meetings. “I feel comfortable that we will be able to keep our rating.” President Felipe Calderon’s proposals, which he submitted to legislators on Sept. 8 along with his 2010 budget, seek spending cuts, a wider deficit and tax increases as revenue is sapped by falling oil output and a drop in tax collection caused by the recession.” Read More.
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