Crap starting to hit the fan in Mexico due to lowering Oil production

[n2doc]

Output Falling in Oil-Rich Mexico, and Politics Gets the Blame


By ELISABETH MALKIN
Published: March 9, 2007
MEXICO CITY, March 8 — The KU-S oil production platform off the coast of Ciudad del Carmen, with its 10,000-ton tangle of yellow and red tanks and pipes, would seem the natural product of three years of soaring energy prices. The newly installed platform certainly is the face that Mexico’s state oil monopoly, Pemex, would like to show off.
But Pemex is in trouble. Its production and proven reserves are falling, and it has no money to reverse the slide. Mexico is the second-largest supplier of imported oil to the United States, after Canada, but its total exports are slipping. If the company continues on its current course, Mexico may one day have trouble just keeping up with rising demand at home.

The evidence of its predicament is clear not far from the KU-S platform. On the horizon, some 50 to 60 miles into the southern Gulf of Mexico, aging rigs billow flames and black smoke over the waters as they burn off the natural gas they are unable to process.

The major reason that Pemex’s prospects are so poor, energy experts agree, is government interference. The Mexican government, which expropriated the oil industry in 1938, depends on Pemex to finance its budget. Last year, sales at Pemex (its full name is Petróleos Mexicanos) reached $97 billion. But $79 billion of that went to the government, Pemex’s chief, Jesús Reyes Heróles, said last month. That accounted for almost 40 percent of the federal budget.

more:
http://www.nytimes.com/2007/03/09/business/worldbusiness/09pemex.html






Note: this is basically an anti-worker article. Supposedly there are "billions of barrels of oil" but they can't extract them because of the terrible, awful Mexican Unions and state run Bueaucracy...
I am sure if only EXXXON/Mobil could run things everything would be so much better :sarcasm:

[GliderGuider]

1. The near- and mid-term implications are horrifying.

I've put up a short analysis of Mexico's looming catastrophe here on my web site. I think this is going to start playing out by the end of this year, and will be in full swing by the end of 2008. There's a good chance it will rip the mask off America's underlying xenophobia.

[brokensymmetry]

5. Good site!

I agree with your analysis. I give it a couple years (i.e., 2009), but events could unfold much more quickly.

[phantom power]

2. I'd love to know who these "energy experts" are, and who they work for.

[NickB79]

8. They sound more like economists to me

If we could just throw more money at the problem, it would be solved! :sarcasm:

[Javaman]

3. I live in Austin and I'm worried about when the next Mexican revolution will begin. nt

Because when the last of the oil dries up, it won't be pretty.

Right now, people down there(politicians)are shitting and are now throwing verbal bricks at each other. I love the blame game. LOL There will be "investigations" and it will quietly be stated that the oil is running out.

Then as the various utilities are cut and brown outs rage across the country. Look out. It won't be pretty.

I live far enough from the border to not get caught in the cross fire, but if the right wing morons* are worried about illegals coming across the border, I wonder what they will think when the flood of refugees come.

It will be interesting.

[hunter]

4. It won't be pretty here, either.

For now we're just pretending we're in a different boat than Mexico. It could get so bad for the U.S. working class that Mexicans won't have any reason to try and migrate.

Any number of things could cause an economic collapse here, but I worry most that the Chinese will simply disengage from the dollar based economies, and distribute their increasing economic output to their own people...

We are toast if the ships full of goods from China stop coming to our ports. How will our leaders keep U.S. workers happy if the shelves and racks at WalMart are empty, and there are no new fancy televisions and other toys to be found anywhere?

[kestrel91316]

6. It could get so bad for the U.S. working class that Mexicans won't have any reason to try and migrat

Something tells me this will be the RW approach to solving the problem.

[hunter]

7. Don't we all love how the "free" market takes care of problems?

Most U.S. citizens don't realize the United States is a Latin American nation dressed all up in fancy clothes.

We've got rid of corruption by calling it something else.

And ketchup is a vegetable too.

[Oerdin]

9. The real reason for declining production in Mexico.

The government of Mexico has used Pemex as a cash cow to fund 50% of the government's operations so that it doesn't have to tax citizens. That sounds nice but then you realize that actual tax receipts in Mexico are the lowest percentage of the economy in any state in the western hemisphere; even Haiti gets a higher share them Mexico does. That means the money which Pemex needs to reinvest in its operations instead gets raided by the government so that millionaires can continue enjoying 8% overall tax rates. Of course output is falling. They can't maintain their existing fields much less spend what they need on exploration and bringing new production on line. Mark my words, Chavez will end up doing the same in his country.