Mexico, One Of The World's Biggest Oil Producers, Is Running Out
Mexico, one of the world's biggest oil producers, is running out
http://www.iht.com/articles/2007/10/...berg/bxatm.php
By Valerie Rota and Patrick Harrington Bloomberg News
Published: October 23, 2007
MEXICO CITY: President Felipe Calderón of Mexico is delivering a grim message: The largest oil producer in Latin America is running out of crude.
"Our oil reserves have been consistently falling," and the decline is "severely threatening" government finances, Calderón told a nationwide television audience in an address last month at the National Palace. That is the same place where seven decades earlier Lázaro Cárdenas cemented the anti-U.S. legacy of his presidency by nationalizing the oil industry.
Mexico was the sixth-biggest producer last year, after Saudi Arabia, Russia, United States, Iran and China, down from fifth in 2005, according to the Energy Information Administration. In 1921, Mexico was No. 2.
Calderón said in his Sept. 2 address that the country held proven reserves that could last nine years. Venezuela, the second-biggest oil producer in Latin America, has reserves to keep pumping at current levels for more than a century.
The ban on private investment in its oil monopoly is depriving Mexico of the benefits of record high prices and contributing to a slowdown in economic growth. Production of crude, the top export for Mexico, has fallen 8 percent since 2004 to a seven-year low, data compiled by the government show.
Mexico is being punished for its inefficiency in the foreign exchange market. The peso fell 0.08 percent against the dollar this year, the worst performance among the 16 most-traded currencies. Goldman Sachs in New York and Credit Suisse in Zurich say that the decline will worsen.
"If the oil output situation was different, if it was stronger, if oil output was rising, not falling, we most likely would be seeing a stronger peso," said Alonso Cervera at Credit Suisse in New York.
The drop in production is hurting economic growth by reducing funds to improve highways, bridges and ports, Cervera said. Oil provides 40 percent of government revenue and the slowdown contributed to a 47 percent decline in the national budget surplus in August, according to the Finance Ministry.
The Mexican economy has grown at an average annual pace of 2.8 percent since 2002, down from 4.4 percent during the previous five-year period.
Output has dropped to a seven-year low of 3.12 million barrels a day as the state monopoly Petróleos Mexicanos fails to develop new reserves to offset dwindling production at Cantarell, the world's largest offshore field.
Crude rose as high as $90.07 a barrel in New York last week. The 50 percent price increase from a year earlier pushed up the Canadian dollar 21 percent against its U.S. counterpart, while the Brazilian real gained 19 percent and the Norwegian krone strengthened 16 percent. Canada, Brazil and Norway all export oil.
The $15.4 billion Petróleos Mexicanos investment plan this year covers only half what is needed to fully develop the country's oil and natural gas industry, said George Baker, who runs the energy research company Baker & Associates in Houston.
Pemex, as Petróleos Mexicanos is known, also needs access to foreign companies' deep-water drilling technology to increase its reserves, said Baker, who has been analyzing Mexico for three decades.
"Oil production in Mexico is declining and declining fast," said Alberto Ramos, a Latin America economist in New York with Goldman Sachs. "What is needed is a serious energy reform that would allow Pemex to partner with other companies."
The peso will weaken 2.8 percent against the dollar by March, Ramos said. The slowing U.S. economy, which weighs on Mexican exports and migrant worker remittances, is also hurting the peso, he said.
Calderón, who served as energy minister for eight months under his predecessor, Vicente Fox, has made no direct calls to end the 1938 ban on private oil ownership, said Sergio Méndez at Prudential Bank in Mexico City. Since taking office in December, the president has instead pointed out the shortcomings of the state-run industry, Méndez said.
Cars are older than gasoline too
FWIW, Isaac De Rivas invented the first automobile about 8 years before gasoline was invented- used to run on "town gas" or "water gas"= clean burning hydrogen...
Correction- not MY patents
I didn't invent the 300+ patents- I physically have the PDFs for posterity. I've given copies of my research to some.
Why re-invent the wheel? Read what's already existent first. pat2pdf.org and Gerry Vassilatos and the late Thomas Valone's books are pretty good places to start. Patents aren't the easiest reading for the non-technical though.
