Mexican officials: state oil monopoly in ‘critical’ condition due to falling res

Mexico’s state oil monopoly is in “critical” condition and needs to boost exploration and seek outside expertise to replenish oil reserves that are currently set to last less than a decade, energy officials said Sunday.

President Felipe Calderon, however, said during a ceremony marking the 69th anniversary of the nation’s oil nationalization that there are no plans to privatize the industry and that Petroleos Mexicanos, or Pemex, “will always continue to belong to all Mexicans.”
Pemex’s proven reserves have fallen to the equivalent of 9.3 years of production from 9.7 years in 2005, and daily output declined last year by 2.3 percent to about 3.2 million barrels, officials said at the ceremony in the Gulf coast state of Veracruz.

“The situation of Petroleos Mexicanos is critical and merits immediate attention,” Pemex Chief Executive Jesus Reyes Heroles said.

The company currently transfers most of its income to the government in taxes and revenue sharing, leaving little for investment. Pemex sent 93.2 percent of its profits to the government last year, accounting for 37.5 percent of federal income.

At the end of last year, proven reserves were 5.8 percent lower than in 2005. And production at the Cantarell oil field, the country’s biggest, fell by 11.9 percent last year.

“We should be conscious that this situation cannot go on,” said Energy Secretary Georgina Kessel, referring to policies that bar Pemex from entering joint ventures and alliances.

She said Mexico must seek “complementary investment,” especially in technology and scientific knowledge, in order to develop energy infrastructure projects.

North County Times