Oil industry in Mexico

Mexico is the seventh largest producer of crude oil worldwide and the tenth largest oil exporting nation (as of 2008). After the US , Mexico ranks second in the Western Hemisphere, just ahead of Canada . However, Mexico is not a member of international petroleum organizations such as B. OPEC .

The oil sector plays a central role in the Mexican economy. The income from the petroleum export amounts to approx. 15% of the Mexican export revenues, although the share is declining. Income from the oil business (including taxes and direct payments from the state oil company PEMEX ) make up about 40% of the state's income.

history

The first oil wells were already carried out in 1869, but the first oil discoveries and the start of Mexican oil production date back to 1901. The two oil fields Panuco-Ebano and Faja de Oro near Tuxpán were developed by 1910. From 1911 oil was exported from Mexico.

Article 27 of the Mexican Constitution of 1917 grants the Mexican government all rights to the underground oil reserves. This led to conflict between the Mexican government and foreign, particularly US oil companies well into the 1930s. In 1925, President Plutarco Elías Calles issued a decree requiring foreign oil companies to register their claims and the concessions were limited to 50 years.

In the 1920s, Mexico was the second largest oil producer and world's largest oil exporter after the USA. As a consequence of the global economic crisis , the lack of new oil discoveries, political instability and Venezuela's rise as more attractive oil producer, production decreased in the early 1930s to 20% of the value of 1921. Production increased again, as in 1932 the oilfield Poza Rica near was found by Veracruz. This field became Mexico's main production area in the decades that followed.

Oil production

Torre Pemex in Mexico City

In 1935 all oil companies in Mexico were of foreign origin. The working conditions for the workers were poor as legal and illegal measures prevented the formation of unions . Despite resistance, the Association of Mexican Workers (Spanish: Confederación de Trabajadores de México, CTM) was founded in 1936 and pursued the project of a generally applicable employment contract for the individual oil companies. A strike was planned to back up the request, but a court was called in instead. On December 18, the arbitration tribunal ruled in favor of the union, awarding workers 26 million pesos for lost wages during the strike.

The Mexican President Lázaro Cárdenas del Río nationalized the oil industry on March 18, 1938 and monopolized the exploration, production, refining and trading of oil and natural gas as well as the production and sale of petrochemical raw materials.

Between 1938 and 1971, Mexico's oil production grew 6% per year. In 1957 Mexico became a net importer because domestic demand exceeded domestic production. Production later increased through 1971 through exploration of new oil fields and natural gas reserves near the northeast border town of Reynosa , but the gap between domestic demand and production widened.

After nationalization

In 1973, the peak of Mexican oil production from the early twenties was exceeded with a production of 190 million barrels, in 1974 the state-owned Mexican oil company PEMEX informed about oil discoveries in the states of Veracruz , Baja California , Chiapas , and Tabasco .

In 1976, President José López Portillo put Mexico's proven oil reserves at 11 billion barrels. In 1983 that number rose to 72.5 billion barrels. Portillo then decided to increase Mexico's oil production and use the oil reserves as a guarantee for international loans, which were mainly intended for PEMEX. Between 1977 and 1980, PEMEX received $ 12.6 billion in international loans, which made up 37% of Mexico's external debt . The loan funds were used to build and operate offshore oil platforms. PEMEX also grew through the construction of onshore processing plants, through the expansion of the refineries and generally through the expansion and modernization of the production capacities. These investments increased oil production from 400 million barrels in 1977 to 1.1 billion barrels in 1982. In 2007, the daily oil export volume had increased to 1.756 million barrels.

Mexico has been hedging its oil revenues with hedge transactions since 1990 . It has been hedged every year since 2005. During the great drop in oil prices in 2009, the country was able to make a large special profit by betting on falling prices.

In 2013, the Mexican parliament approved the abolition of the state monopoly of production after 75 years and the approval of private oil companies after production had declined for years and PEMEX was unable to raise the necessary investments to develop new oil fields. The privatization policy has been implemented gradually since 2015.

Oil production

Offshore platform in the Gulf of Mexico

Cantarell

Mexico produces three types of crude oil : heavy Maja-22 (more than 50% of total production), light isthmus-34 with low sulfur content (28% of production) and extremely light Olmeca-39 (20% of production). Mexico has the second largest proven oil reserves in the western hemisphere with 30.8 billion barrels (2002). In the western hemisphere only Venezuela has higher proven oil reserves, Mexico ranks ninth worldwide.

Cantarell has long been the largest oil field in Mexico and one of the largest active oil fields in the world. However, production reached its peak in 2003 with 2.1 million barrels per day and by November 2010 sank dramatically to only 464,000 barrels. Several oil fields have been discovered in the Chicontec Basin, but they contain mostly heavy crude oil. The development of these fields is currently ongoing.

The Ku Maloop Zaap oil field was discovered in 2002; original estimates were based on a maximum production capacity of 800,000 barrels, but the field was already producing 832,000 barrels in August 2010, making it the most productive Mexican oil field since 2009. However, the field was unable to fully absorb the unexpectedly sharp decline in production from the Cantarell oil field, which is why Mexican oil production has been falling continuously since 2004. A certain stabilization was only achieved through the approval of private companies.

From 2004 to 2019, daily production in Mexico decreased from 3.4 million to 1.7 million barrels per day. In 2019, the discovery of the Quesqui oil field in the state of Tabasco was announced. With estimated reserves of 500 million barrels of crude oil, it is the largest newly discovered oil field in 30 years.

Web links

Commons : Oil Management in Mexico - Collection of Pictures, Videos and Audio Files

Mexico's crude oil production chart - data from US Department of Energy
Energy Secretariat (SENER) (English)
Energy Regulatory Commission (CRE )
Energy Savings National Commission (CONAE )

Individual evidence

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