Thread: Mexicans fight over falling oil production

Mexicans fight over falling oil production

By Franco Ordonez | McClatchy Newspapers
Posted on Wednesday, April 23, 2008 email | print tool nameclose
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Franco Ordonez / Charlotte Observer / MCT


In April, the scene inside Mexico's lower house of Congress looked like a pep rally. Giant tarps were draped over the pulpit reading "CLOSED" and "No to Privatization." | View larger image
MEXICO CITY — The price of oil is reaching record levels worldwide, but Mexico, long considered an oil power, is failing to reap the rewards because its state-owned oil company hasn't developed many of the areas known to be rich in petroleum.

President Felipe Calderon this month proposed allowing the ailing state oil company to contract with international companies to help drill deeper in those areas. But leftist lawmakers have blocked the legislation to allow that, claiming that Calderon's proposal amounts to privatizing a national treasure.

Leftist leaders have vowed to increase their protests during the president's visit this week to the United States, accusing Calderon of making a "business trip" to report on his plans to sell the state oil company, Petroleos Mexicanos, or Pemex.

"The fight for Mexican oil will continue ... so that it remains a Mexican resource to support development and not be an appendage for U.S. consumption," said Alejandro Chanona, leader of the Convergence Party in the lower house of Congress.

Opponents of allowing Pemex to partner with experts from the United States and other countries on oil development see the issue in deeply emotional terms.

Thousands of "women warriors" armed with videos and printed materials and dispatched door-to-door to protest the bill are called "las Adelitas" — named for the female soldiers who fought during the Mexican Revolution.

Their goal is to drum up support for an April 27 rally in downtown Mexico to protest the "gravity of consequences of the privatization of the oil industry." A similar rally on April 13 drew more than 100,000 people.

Andres Manuel Lopez Obrador, who narrowly lost the presidency to Calderon in 2006, is organizing the protests, heading a group known as the National Movement for the Defense of Petroleum.

Mexico's Chamber of Deputies has been taken over by opponents of the bill since April 10, and giant tarps reading "CLOSED" and "No! To Privatization of Pemex" have been draped over the chamber's podium. Signs taped to chairs and desks of congressional leaders read "Traitor to the Homeland."

Mexico's oil has long been a symbol of national pride — and revenue. Pemex profits provide 40 percent of the national budget. Even the smallest news about the company can draw front-page headlines.

Pemex reported Monday that oil production fell 7.8 percent during the first quarter, to 2.91 million barrels a day. Officials say the company lacks the money and expertise to embark on new deepwater drilling projects in the Gulf of Mexico.

Calderon's proposal would allow Pemex to hire private companies to build and operate refineries. He denies that it's the first step toward privatizing Pemex, which was created in 1938 when President Lazaro Cardenas expropriated the oil industry after a labor dispute over pay for Mexican workers.

The move made Cardenas a legend. Since then, oil hasn't been treated as a commodity, but as a symbol of national sovereignty. Mexico's Constitution enshrines the state monopoly on oil exploration.

Calderon says his proposal is "not privatizing," but "strengthening Pemex, so that Pemex, the company of all Mexicans, can produce more petroleum, more natural gas, more gasoline and allow us to have an income that will help us finance the future of our children."

On Tuesday, during a visit with U.S. and Canadian leaders in New Orleans to discuss immigration, trade and security, he called the takeover of the Mexican congressional chambers "ridiculous"

"I simply deplore this attitude that only damages the image of those who have it," he said. "It hurts them and Mexico."

High oil prices have helped mask Pemex's problems, which have been known for decades. They include accusations of corruption within the company's top leadership and in the workers' union. It hasn't helped that the government has milked Pemex of cash to sustain the country's infrastructure, leaving the company with little money to invest in the exploration of available oil deposits.

Production at the Cantarell oil field, once the world's biggest offshore oilfield, is declining 20 percent a year. At current production rates, Mexico's oil reserves will last less than 10 years, experts say.

The country already imports gasoline from the United States because of a lack of refineries, and Pemex has explored only about a quarter of Mexico's prospective oil fields, experts say.

The coalition of leftist leaders from the Convergence, Democratic Revolution and Workers' parties seized control of Mexico's lower house of Congress on April 10. Some have spent the night in sleeping bags. They're demanding a three-month national debate on the oil issue.

"We haven't slept in 12 days," said Jose Jacques Medina, a member of the leftist Party of the Democratic Revolution (PRD), wearing a white Pemex hard hat and a white jump suit.

Legislators acknowledged that there could be political repercussions for taking over congressional chambers, but they said that Pemex is too valuable.

"There is a political cost, but it's worth it to protect Mexico's oil resources," said Alejandro Sanchez Camacho, a member of the PRD. "If we lose petroleum as a resource, we will never get it back."

(Ordonez reports for the Charlotte Observer.)

McClatchy Newspapers 2008

http://www.mcclatchydc.com/226/story/34704.html

What would the world look like if back in the Carter, and Reagan years, a realistic and well planned energy policy was put forth with mandates placed on congress to contiue with such a policy?

Instead we concentrated on cheap(?) susidized housing for the past 30 yrs. Look where that got us.

Here we are agian looking at the policy problems of another country, not our own.

Go Ron Paul!

Yes, we can all see how the Mexican people have benefited from the nationalized oil riches in their nation with 90 percent living in poverty.

In Mexico, the aristocracy merely uses the government they control to make money from the oil.

W

They are not pumping more because it keeps the prices high. High Prices equal high profits for all the fat cats. The peasants have no say in what the Kings do.