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 News Around the Republic of Mexico | March 2005 
Fox Seeks Reform At Mexico's State Oil Company
 Associated Press
Ciudad del Carmen, Mexico - Mexican President Vicente Fox said Friday he's confident that reforms can make the state-run oil industry more productive.
Speaking at a ceremony marking the 67th anniversary of the nationalization of private oil assets, Fox warned that without immediate reforms, "We will all suffer the consequences."
The state oil monopoly, Petroleos Mexicanos, accounts for about 40 percent of the government budget and hands over more than 60 percent of its own annual revenue to the government in taxes and royalties.
That limits its investment possibilities. Last year, despite record crude oil production, this fiscal burden translated into a loss of $1.3 billion on record sales of $69.1 billion.
Even so, Fox said Pemex has stepped up investment.
"We have been able to increase the replacement rate from a low and worrisome 14 percent in 2001 to 57 percent in 2004," Fox said. Pemex's investment since 2001 has averaged about $10 billion a year, double what it was in previous years.
The Fox administration has proposed easing taxes on Pemex's new projects and giving the company more independence to spend where it sees fit.
The government also is seeking legal reforms that would let Pemex ally itself with private companies to exploit reserves in deep waters of the Gulf of Mexico, for which it lacks technology.
But with political rivalries growing ahead of the 2006 presidential race, Fox has been unable to win support from the country's two main opposition parties.
Pemex Chief Executive Luis Ramirez also endorsed greater private and public cooperation Friday. "The suggested structural change is necessary to strengthen the industry, and avoid privatization," Ramirez said.
Meanwhile, Pemex announced that its proven hydrocarbon reserves fell last year to 17.7 billion barrels of crude equivalent from 18.9 billion barrels a year earlier.
The company reported production in 2004 of 1.61 billion barrels of crude equivalent with additions of just over 916 million barrels of proven, probable and possible reserves.
Pemex said proven crude reserves as of Jan. 1 stood at 12.9 billion barrels, down from 14.1 billion a year earlier, while proven natural gas reserves were little changed at 20.4 trillion cubic feet.
Pemex's production of close to 3.4 million barrels a day of crude oil puts Mexico among the world's top 10 oil-producing countries. It is also among the top three foreign suppliers of crude to the United States.
Of the 916 million equivalent barrels of oil and gas incorporated last year, 240.8 million were proven, 222.1 million were probable and 453.4 million were possible reserves. |
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