The future of the petroleum company PEMEX in play
The Mexican congress should debate how to extract the best profit from the diminishing supplies of petroleum and its elevated price before the business ends because it is surrounded by the laws of protection and environmental sustainability. However, while
The soap operas are formed from classical stereotypes. In these Mexican soap operas there is always the bad person, a hero, a rich woman, a poor person, a venerated mother and the antagonist, the hateful villain. The secondary roles vary, adopting positions as typical as the good poor person, the evil millionaire changed into the patron, and the prodigal son. No matter what, there will always be the good and the bad.
“If PAN and PRD, Lopez Obrador y Calderon, take the roles of good and bad, the PRI, third in disagreement, is the stupid one who will go with whoever pays better political dividends” Something of that plot stew exudes the discussion of energy reform in the Mexican congress where the roles invert according to who writes the plot. For those who advocate the opening of energy resources to the private investment, the villains are personified by Andrés Manuel Lopez Obrador and the Revolutionary Democratic Party (PRD). Lopez Obrador lost the presidential election of 2006 by a narrow margin before the winner, Felipe Calderon Hinojosa. Now, Lopez heads the opposition to the privatization of the underground resources. For him, evilness is in the president, his allies, and the National Action Party (PAN), the conservative organization that from 2000 substituted in power the Revolutionary Institutional Party (PRI), the leader of
If PAN and PRD, Lopez and Calderon, take the roles of the good and the bad, the PRI, third in disagreement, is the stupid one who will go with whoever pays better political dividends. The only roles that remain are those of the good mother and the evil aunt. In both cases, this is the state petroleum company, PEMEX, waif and villain, the holiest of all holiness.
PETROLEUM: A QUESTION OF FAITH?
“The prohibition of foreign investment in hydrocarbons was overcome by the historical dynamic and economic globalization but not in the Mexican collective unconsciousness”
The sea surrounding the reform has been rough since Lopez Obrador called the new civil resistance. After losing the elections, Obrador yelled fraud in the streets but his movement died of starvation. Why would it be different now?
Petroleum seems to be a matter of faith before economics. The Mexican constitution has impeded foreign investment in hydrocarbons, considered to be of strategic and sovereign value, since 1937, when the President, Lazaro Cardenas del
“Calderón affirms that he will pay what is necessary to free PEMEX from sectorial interests and give it autonomy”
This is not minor. The government of Vicente Fox, Calderón’s predecessor, was the first one seeking to open the energy business. It failed. Between 2000 and 2006, Fox stagnated in the Congressional sea. Calderón goes to his entrusted confidantes that possess better political skills and maneuvers than Fox. He has placed his confidence in obtaining social safety reform, a flag that Fox guarded with mothballs when the legislators would never. Now he affirms he will pay the necessary costs to liberate PEMEX from sectorial interests and give it autonomy.
REFORMS IN THE SPIRIT OF BLACK-AND-WHITE CINEMA
“The PRD has threatened massive marches in the whole country and the Wall Street Journal has alerted even greater risks for the reform”
The government would like Pemex to associate with companies specializing in developing fields in deep waters, and is trying to revitalize it by reducing the tax burden so that it may invest its increased amount of available capital. (The tax pressure on the company is brutal: in 2007, when its earnings were approximately $61.125 million, the government demanded taxes and rights for … $62.620 million).
Calderón has said that he will only present the project if he obtains the minimum consensus with the opposition: however, the hopes are not high. The PRD has threatened massive marches in the country and the Wall Street Journal has alerted even greater risks for the reform. According to the newspaper, the path also gets clogged with the so-called buddy capitalism, a group of Mexican families that control key industries, walling off its business from international competition. “PEMEX lacks money to exploit new deposits, and the production of crude oil has fallen by 300,000 barrels daily from 2004”
Even more, the government has been incapable of demonstrating coherence, confusing the roles of the good and the bad. Recently, the transportation business of the family of Juan Camilo Mouriño, Government secretary and political operative of the President, was unionized in a corruption scandal. Mouriño obtained contracts from PEMEX while he was working as the Secretary of Energy in 2003. His supervisor then was Calderón.
The plot of the reform has become more of the sort found in black-and-white cinema than in the rhetorical naivety of the soap operas. And the one who continues paying is PEMEX. The company lacks money to exploit new deposits or to look for more fields, and its production of crude oil has fallen by 300,000 daily barrels from 2004, preventing the country from earning approximately 10,000 million dollars.
“The verification of which the state administration is not equivalent to inefficiency takes Petrobra’s symbol”
The government has announced that PEMEX sank in the ranking of global petroleum companies, passing from the sixth position in 2004 to the 11th in 2007 even when, at that time, it carried out the largest volume of investments in history. PEMEX has confirmed that its feet are planted in a mire. Without funds or freedoms, PEMEX will frustrate the needs of competitiveness in the Mexican economy, and
Both companies are demonstrating that, between one State that wants to and another State that does not, businesses will be drained. In the front, the proof that state administration does not equal inefficiency wears the Petrobras symbol, public-private Brazilian company.
“According to official documents, the pace of current Mexican extraction has only 9.2 years of proven reserves” In this soap opera, Petrobras is the unwanted daughter: everyone knows that she is in
The Mexican reserves have been diminishing since the mid 1980’s. Public estimations calculate that, since 2000, the proven reserves brought 5,350 million barrels of crude oil. In agreement with the official Diagnostic document: PEMEX’s situation, at the pace of current extraction, leaves
THE UNITED STATES SUPPLY
The magnitude of the affair exceeds
But the same argument has its back to the mouth of the opponents, for whom, if
This is a plot without technical bases, since a potential asset lacks practical value. To sit on the golden calf does not make one richer: it only provokes a backache. The opposition believes that on the other hand, PEMEX can overcome the contractions to arm itself with money that it does not possess and trepan the slimes of the Gulf only for itself.
THE POPOTE EFFECT
While the opposition’s argument has not been convincing, it has effectively generated panic. The government, unfortunately, is no match for it. One of the arguments is that
“If the Popote Effect means to state how growth opportunities are lost because of paralyzed procedure, for others it confirms an unlucky destination of which there will always be an imperialistic horde sucking blood”Inaugurated by Fox, such a theory holds that, given the lack of PEMEX’s action in the Gulf of Mexico, international companies are sucking the crude oil and taking advantage of the fact that
And there it is, when the nationalism platform moves the floors: once again, do Americans take advantage? Perhaps the indescribable and often mentioned Porfirio Díaz was correct? Poor Mexico, he said, it is so far away from God and so near the
No, he wasn’t necessarily correct, but it is just as if he was. The rhetoric game has tensed the ropes, so that if the Popote Effect means for some a loss of growth opportunities due to paralyzing procedures, for others it confirms an unlucky destiny in which, no matter what you do, there will always be an bloodsucking imperialistic horde.
NEITHER ABSOLUTE GOOD GUYS NOR PERPETUAL VILLAINS
Far from the discussion about sovereignty from another age, the critical issue is how to extract the best advantage from an input like petroleum, which suffers from diminishing surpluses, an elevated price, questioning by influential consumers, and environmental protection and sustainability laws that progressively wall it in.
In energy reform,
But if the political powers don’t understand this backdrop, they must be watching another channel while the soap opera plays out in a central time slot. In addition, the argument is changed. On television, the evil characters are always villainous and the good characters have a seat reserved with Saint Peter, but in the real world no one is absolutely good or perpetually evil, nor are the affectionate mothers untouchable nor the villains perpetually deplorable.
Companies like PEMEX are incapable of remaining vestal virgins in this century of change and dynamism. Like in the soap operas, the business that they participate in has its own impious maxims, like that which states that, once the splendor of the old days is lost, every television star–like PEMEX or the sovereignty of Mexican petroleum–is left with minor roles, in minor productions.