The Briefing Room
General Category => Science, Technology and Knowledge => Energy => Topic started by: Elderberry on October 13, 2019, 01:45:33 pm
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Houston Chronicle by Emily Pickrell Oct. 11, 2019
Mexico still celebrates a federal holiday dedicated to the 1938 nationalization of the oil industry that seized reserves and facilities from international energy companies. To this day, Mexico’s presidents unfailingly attend celebrations commemorating the event that returned oil resources to the Mexican people and ended decades of exploitation with few public benefits.
The place that the holiday, known as Oil Expropriation Day, holds in the national consciousness indicates how steep a cultural climb it was in 2014 for the administration of former president Enrique Pena Nieto to end the 75-year monopoly of the state-owned oil company, Petroleos Mexicanos, and reopen Mexico’s energy resources to private investment. It’s also key in explaining why the country under populist President Andres Manuel Lopez Obrador is moving once again to freeze out foreign oil and gas companies and consolidate the power and influence of Pemex.
“The current administration believes that a bigger Pemex is a more profitable Pemex,†said Duncan Wood, director of the Mexico Institute at the Wilson Center for Public Policy in Washington. “This government wants to ensure that Pemex is the dominant actor at every level of the value chain in oil.â€
The effort to restore Pemex as the dominant player in the Mexican industry comes less than five years after landmark legislation changed the Mexican constitution to allow international companies such as Royal Dutch Shell, BP and Exxon Mobil to invest and partner with Pemex. The new laws by design diminished the role of Pemex, hoping to attract much needed foreign investment and know-how to reverse Mexico’s rapidly falling oil production rates and end chronic fuel shortages.
But since Lopez Obrador took office in late 2018, his administration has indefinitely suspended planned auctions to lease both deepwater and onshore fields to international companies. Instead, Pemex is developing the prospects and is even building a new, multibillion-dollar refinery to reduce fuel imports.
More: https://www.houstonchronicle.com/business/energy/article/Despite-energy-market-reforms-AMLO-seeks-to-14510094.php (https://www.houstonchronicle.com/business/energy/article/Despite-energy-market-reforms-AMLO-seeks-to-14510094.php)
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A holiday celebrating the decision to not honor contracts?
Seems disturbing.
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The big companies have created value where PEMEX has destroyed it, so the commies in the PRI want to confiscate the wealth created to line their pockets
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A holiday celebrating the decision to not honor contracts?
Seems disturbing.
The PRI did it. They were and still are fascist-communist.
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And it was not just oil they nationalized. Concrete, steel, electricity and other heavy industrial operations were also nationalized along with ALL the property of the Catholic Church, including the churches.
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And it was not just oil they nationalized. Concrete, steel, electricity and other heavy industrial operations were also nationalized along with ALL the property of the Catholic Church, including the churches.
With that track record, it is a wonder if anyone would spend any money in Mexico much less live there.
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Several years ago, Calderon unsuccessfully pushed for an end to nationalization. It would definitely be in Mexico's best interest to do so. But the envy of the Left always stands in the way. But until they do, the US won't have to worry about any serious competition from them in the Gulf. Mexican oil production continues to fall, and the government continues to loot the revenues that are required for maintenance and expansion.
The drawback to any type of nationalization is that everything becomes cost-driven instead of profit-driven. Bureaucrats can't justify spending money on new equipment if they don't ever see the reward of that expense. Just like the national healthcare system in Canada that can't justify the purchase of an MRI machine since they don't get paid a dime to perform MRIs.
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With that track record, it is a wonder if anyone would spend any money in Mexico much less live there.
I've been expecting Mexico to collapse for several years now, especially with the narco gangs running most of the country now.
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Both Saudi Arabia and Mexico decided to nationalize its oil production and processing.
The big difference is Saudi remained shrewd in doing so and did not cut the cords of the western companies who had owned and operated Aramco and allowed them to remain in a service capacity to perform the management of the fields and facilities under Saudi direction.
Saudi Aramco remains the most profitable company in the world and is known for its technical expertise in all facets of the industry.
Mexico, similar to Venezuela, simply kicked out the companies and managed things themselves.
The results were predictable in terms of field management, profitability of operations and, of course, graft.