Mexico wising up on oil-sector FDI

WORLD NEWS: "Mexico Is Near Easing Oil Laws in Bid to Attract Foreign Firms," by David Luhnow and Peter Millard, Wall Street Journal, 22 October 2008.

Inevitable and predicted by everyone—including me—for a while: Mexico has to open up it's NOC known as PEMEX (Petroleos Mexicanos) to foreign direct investment, otherwise it's simply lead goose for Venezuela's and Iran's and Russia's similar stupidity (and declining production rates).

Mexico is down to just 2.72 mbd (million barrels per day), its lowest total since 1995, meaning they're going back in time—duh!

Mexico's government gets almost 40% of its federal budget from oil exports.

Aging fields inside Mexico need to be augmented with "vast untapped fields in the deep waters of the Gulf of Mexico," but that takes money and technology.

Without both, Mexico becomes a net importer in half a decade.

Comments

[Santiago]

That half a decade stuff at least gives us an upper bound on how long the populists politicians in Mexico can afford to keep yelling: "protect OUR oil, don't let the Gringos have it!" It would be nice if we could avoid the whole shock to the federal budget and all, but either way, Pemex will have to be privatized, not if but when.