Mexican News
The latest news from and about Mexican issues.Monday, October 05, 2009
Comments from a Major U.S.-Mexico Drug War Conference
Mexidata, October 5, 2009- “El Paso was the scene last month as academics, students, journalists, community members, and a smattering of government officials from the United States, Mexico and other parts of the world gathered to analyze and debate the 40-year war on drugs. Located next door to blood-soaked Ciudad Juarez, the event took place at a time when a sense of urgency literally prevailed just outside the conference doors. Even as conference attendees rolled up their sleeves to discuss and debate the burning issues of the day, drug-fanned violence flared only miles from the meeting sites. Among the numerous stories carried in Ciudad Juarez press dispatches, a man was found beheaded near a ditch, four young people were gunned down in a motel, and a woman was slain in the Felipe Angeles neighborhood visible from the UTEP campus. In the hours after the meeting ended, an additional 17 people were slaughtered in Ciudad Juarez.” Read More.
Friday, September 04, 2009
Mexico energy ministry unhappy with Pemex results
Reuters. September 4, 2009 - “Mexico’s energy minister said on Friday she is concerned about state-run oil company Pemex’s poor financial results and the company’s board is reviewing possible actions to halt the decline. The minister’s comments about Pemex, led by Chief Executive Officer Jesus Reyes Heroles, come as President Felipe Calderon is promising a shake-up in his administration. “Unfortunately, the financial situation has not improved as it should be improving and we are analyzing what are the things we can do to reverse the situation,” Energy Minster Georgina Kessel said in an interview with broadcaster Televisa. Pemex, which is state-owned but finances much of its spending on debt markets, posted a 93 percent drop in second-quarter net profit as revenues slid 30 percent due to lower crude prices and export volumes. In his state of the nation speech on Wednesday, Calderon said he wants to see further reform in the oil industry to boost Pemex’s profitability. Read More.
Friday, August 07, 2009
Guadalajara Plays Host to North American Leaders
Americas Society, August 6, 2009 - “The leaders of Canada, Mexico, and the United States meet August 9 and 10 for the first North American Leader’s Summit since U.S. President Barack Obama took office. More than six months into his term, Obama has met with each leader multiple times, already visiting Prime Minister Stephen Harper in Ottawa and President Felipe Calderón in Mexico City As in those cases, the summit in Guadalajara will likely focus on issues such as trade, border issues, migration, and security. That the meeting takes place in Mexico’s second biggest city may pull the center of gravity toward challenges facing the host country. Infected by the financial drag ailing the United States, Mexico’s economy also fell victim this year to the outbreak of A/H1N1 flu and a barrage of bad news about bloody drug cartel violence. This week Banamex predicted that Mexico’s economy could shrink by 6.8 percent in 2009. Moreover, despite the president’s high approval rating, Calderón’s party saw its congressional mandate diminished as the opposition Institutional Revolutionary Party swept a majority of House of Deputy seats in July elections. Read More.
Friday, July 31, 2009
Pemex Output Goal ‘Uphill Battle,’ Forces Borrowing
Bloomberg, July 31, 2009 - “Petroleos Mexicanos, Latin America’s largest oil company, is likely to miss its 2009 output goal even after lowering its production forecast, forcing the company to seek other sources of financing to pay for its largest-ever capital spending plan.
Pemex, which hasn’t increased production in 3 years, needs to raise output by at least 1.6 percent in the final six months of 2009 to reach a goal of 2.65 million barrels a day, according to data compiled by Bloomberg. Mexico City-based Pemex lowered its forecast yesterday on an earnings conference call. Last year, Pemex’s output fell at the fastest rate since World War II, costing it more than $20 billion in potential sales amid record crude prices. Pemex cut its forecast three times last year as its then-largest field, Cantarell, dropped more than twice as fast as government predictions. “It is an uphill battle to surpass the natural decline in Cantarell,” Gianna Bern, president of Brookshire Advisory and Research Inc., said in an interview yesterday from Flossmoor, Illinois. “Given bureaucratic delays, it could impede efforts to increase production. It is not very likely.” Output has fallen since July 2006 for 35 consecutive months as Cantarell, once the world’s third-largest field, loses pressure and becomes increasingly difficult and expensive to exploit.” Read More.
Thursday, July 30, 2009
Drillers bid adios to Canada, hola to Mexico Pemex stokes oil boom with $240B boost
Calgary Herald, July 30, 2009 - “Calgary-based drillers are ripping out heaters and installing air conditioning units on their rigs as the crews trade winter gloves for sunblock to get in on a growing Mexican oil boom. As low natural gas prices continue to idle drilling equipment in Canada, the national oil company of Mexico is implementing plans to invest $240 billion US over the next 14 years to stoke its declining domestic industry. Several Calgary drilling companies have moved rigs under contract tothearid Chicontepec region in east-central Mexico, the focus area for Petroleos Mexicanos, the state oil monopoly known as Pemex, and more are on their way. One small Calgary company, Xtreme Coil Drilling Corp., has no rigs at all left in Canada and has moved many of its management functions to Houston as it prepares to relocate its ninth and 10th rigs into Chicontepec from Texas. Of the six rigs it has left in the United States, only three had wells to drill earlier this week. “We don’t have a single rig in Canada rightnow--Canada for us has been a real challenge,” said Rod Uchytil, Xtreme president and chief executive, who had two rigs probing for shallow gas in Alberta until about a year ago. Read More.
Wednesday, July 29, 2009
Mexican Currency Drops as Remittances Slump for an Eighth Month
Bloomberg, July 29, 2009 - “Mexico’s peso fell after the central bank said remittances declined in June for an eighth straight month, reducing dollar flows into the Latin American country. The currency weakened 0.4 percent to 13.2539 per U.S. dollar at 5 p.m. New York time, from 13.2013 yesterday.Banco de Mexico today said remittances, the country’s second-biggest source of dollar flows, declined 15.1 percent in June from a year earlier. The central bank also said Mexico’s economy will shrink between 6.5 percent and 7.5 percent this year, more than the range of between 3.8 percent and 4.8 percent that it previously predicted. “The peso is very sensitive to remittance data,” said Mario Copca, a currency strategist at Metanalisis SA in Mexico City. “Investors use remittance data to measure what kind of impact the U.S. slump continues to have on our economy.” Mexico sends 80 percent of its exports to the U.S., which is also the biggest source of revenue from money transfers from workers abroad, tourism and foreign direct investment. U.S. stock losses and a slump in oil prices also eroded investor demand for emerging-market assets, said Omar Martin del Campo, a currency trader at Banco Ve Por Mas SA. Read More.
Sunday, July 05, 2009
Mexico’s Business Sector Has a Long Way to Go
The Epoch Times, July 4, 2009 - “Mexico, the manufacturing hotbed of U.S. companies, faces strong hurdles toward achieving its economic potential, a new report by the World Economic Forum (WEF) has found. Mexico has more weaknesses than strengths when it comes to trade competitiveness and business innovation, according to the Mexico Competitiveness Report 2009, released last week by the WEF. the WEF noted that Mexico is especially dependent on state-owned petroleum company Petroleos Mexicanos (PEMEX) for governmental revenues. But PEMEX’s oil wells may run low in the foreseeable future. With the government dependent upon PEMEX as a cash cow, a funding shortfall could manifest in the near future if the government does not invest in other sources of income, according to a recent Knowledge @ Wharton (KW) study. KW is the publishing arm of the Wharton School of Business at the University of Pennsylvania. In addition, Mexico’s main trading partner by far is the United States, and any economic downturn here results in severe repercussions in Mexico. During the first quarter of 2009, Mexico exported products worth $52 billion to the U.S. and imported $38 billion of goods from the U.S., contributing $14 billion to the U.S. trade deficit. Mexico’s world trade was $72 billion during the same period with a little over 72 percent of it consisting of exports to the United States, according to Organization for Economic Co-Operation and Development (OECD) statistics.” Read More.
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.
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