Mexico’s oil crisis stirs a political drama

MEXICO CITY: A bitter debate over what to do about the ailing state oil monopoly has dominated national politics in Mexico in recent weeks, tapping strong emotions on both sides and resurrecting the political fortunes of the leftist leader who narrowly lost the 2006 presidential election.

Revamping the oil company, Petroleos Mexicanos, or Pemex, is perhaps the greatest challenge facing the administration of President Felipe Calderon, a conservative economist who won the disputed 2006 election by a hair’s breadth.


At stake in the debate is not only the future of the Mexican economy but also the supply of oil to the United States. Last year, Mexico was the third-largest supplier of crude imports to the American market, behind Canada and Saudi Arabia.

The government has neglected the public company for 20 years, siphoning off its profits for bureaucrats’ salaries and patronage projects. Now production is dropping, reserves are dwindling, and Pemex lacks the technology to go after undersea oil, the administration says.

IHT