Thursday, April 24, 2008

Worse News

Mexico's existing oil fields are running low, and the state-run company that drills it is in no condition to go and get more, even though it's down there.

Mexico's Cantarell oil field — discovered in 1976 and one of the world's largest — is drying up. Pemex reported a 2007 net loss of US$1.48 billion (euro98 billion) this week, as its revenues are drained to fund schools, hospitals and public works. Meanwhile, every other major oil company is reinvesting unprecedented profits in oil exploration.

Mexico could lose its standing as a major oil exporter in five years if it does not find more oil, experts say.

The logical move -- a partnership with an American or European oil company, is political poison. It seems there's an issue of national pride involved in anything that looks like cooperating with the Americans:

But while Mexicans may shop at Walmart and eat at McDonald's, oil is a birthright. The sentiment dates back to March 18, 1938, when President Lazaro Cardenas kicked out the American and European oil companies that refused to pay union wage demands while reaping Mexico's oil profits.

Every year on that day, school children learn about the bold eviction of foreign companies, especially those from the United States, whose annexation of half of Mexico's territory after the 1846 Mexican-American War still hurts.

This story is less disturbing to me from an energy standpoint (someone will get the oil up somehow, have no fear) than from my interest as an American in having an economically healthy, politically stable Mexico. Both those qualities in relative terms, of course.

The article, by the way, also features the expression "el fast-track."

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