Mexico could become net oil importer in 10 years: Pemex chief

Platts
Varacruz, Mexico
Petroleumworld 02 23 05

Mexico, which currently exports some 1.9-mil b/d of crude oil, could become a
net importer within 10 years unless some way is found of stemming a looming
financial crisis at Pemex, the state company’s director-general, Luis Ramirez
Corzo, said Monday. Ramirez was speaking at the official opening by President
Vicente Fox of Exitep 2005, the international oil engineering expo and
conference.

Ramirez said Pemex is producing crude at record levels, but a punitive tax regime–which drained it of $50-bil last year–has spelt regular losses, and technical bankrupcty is only a few years away.

The present situation “simply cannot be sustained,” said Ramirez, who called on the nation’s legislators to devise a tax scheme for Pemex that “would allow it to behave like any other company, competing with similar enterprises in the rest of the world, and earning more money for the country.”

Ramirez called for an early agreement on a “major structural change” that
would open Pemex to private-sector technology and capital, without which “a
great part of our oil potential is currently out of our reach–including what
is in deep waters.”

Ramirez, for the past few years, has made several appeals for reform. So far, though, the pleas seem to have fallen on deaf ears among politicians. On a positive note, Ramirez said Pemex had found new reserves to replace 57% of that lost in exploration.

The reserve replacement ratio is up from 14% in 2001. Crude output in 2004 reached 3.383-mil b/d, a 12.3% increase from 2000, and 42% was new production as a result of a $10-bil a year capital spent on upstream development. By 2006, Pemex would be producing 3.8-mil b/d of crude, with 55% new production, Ramirez added. Meanwhile, Pemex’s gas output reached 4.57-bil cu ft/day in 2004, down from a record high of some 4.9 Bcf/day in 1999 but rising again. Ramirez said Pemex’s gas output target for 2006 is 5.6 Bcf/day.