Oil Energy Money

There’s quite an uproar about companies looking to move in to Mexico’s deep sea reserves. 

 Since the early 20th century, Mexico’s national oil company Petróleos Mexicanos (or Pemex) has been a national entity not open to foreign investors.  However, nationalised firms like Qatar’s Qatar Petroleum or Saudi’s Saudi Aramco have been successful due to vast reserves and heavy government support.  Pemex has not been so successful, it’s heavily in debt and pays high taxes, 80% of its revenue went to the government. There have been six deep sea oil wells drilled on the Mexican side of the gulf. The American side has 167 wells. The firm reported a $1.5bn loss last year and only 12 billion barrels of proven reserves. In comparison, Saudi Aramco has 260 billion. 

 Pemex’s clearly troubled operations have led to a suggestion by president Felipe Calderón to open ownership of the firm to foreign investors. Many citizens oppose the change and rightly so, taking such a large enterprise private creates vast opportunities for corruption and exploitation by select individuals. Such problems could be prevented by open, multi-lateral talks with foregin countires and corporations. Royal Dutch Shell is building a project called ‘Great White’ eight miles from the Mexican borders which could easily be extended across.

More on this we get it, but foreign investment seems the only option for a firm this troubled.

One Barrel of Sweet and Light on NYMEX At the Time Of Writing: $101.58 (So far so good, look for another temporary fall below 100)