Fiscal crisis for Mexico as oil starts to dry up

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Cardenas, Mexico — Gonzalo Rodriguez has an unenviable task as the boss of a major oil field — ripping out a large part of the pumping and compressing machinery that collects the output from scores of wells.

“Unfortunately, we don’t need this capacity anymore,” he said. “This isn’t like the old days, and they aren’t coming back.”

Like much of Mexico’s giant oil production apparatus, this area, known as the Bellota oil field, is in an apparently unstoppable decline. At current extraction rates, the nation has only 10 years of proven oil reserves remaining. And as Mexico prepares to vote in Sunday’s presidential election, the leading candidates disagree bitterly about what, if anything, can be done to halt the impending collapse of the industry that forms the backbone of the national economy.

Left-of-center candidate Andres Lopez Obrador wants to de-emphasize production of crude oil and focus instead on refined products such as gasoline and plastics, while his main challenger, conservative Felipe Calderon, proposes opening the industry to foreign oil corporations to help increase crude exports.

SF Gate