Mexico's Oiling Days Are Numbered

IBD ^ | May 16, 2008

[montag813]

Mexico's reliance on oil earnings for 40% of its budget.

Oh man. The U.S. is already their outsourced unemployment insurance provider. What will they do, send another 20 million north?

[bilhosty]

Mexico is running out and we are doing nothing to develop other sources. Real smart country clubbers, real smart, This is why we will have your heads handed to us on a platter this November. Granted the Dem’s aren”t doing anything either, but you are the ones in power.

[dcwusmc]

Awww, poor Mexican government. Too bad, so sad.

[spanalot]

how did they lose so many billions of barrels of proven reserves?

[Steve Van Doorn]

what happened to that huge find in the gulf that Mexico was going to do the drilling for?

[marktwain]

“Mexico is running out and we are doing nothing to develop other sources. Real smart country clubbers, real smart, This is why we will have your heads handed to us on a platter this November. Granted the Dem’s aren”t doing anything either, but you are the ones in power.”

---

The Republicans have not been in power for nearly two years.

If you consider the power of the MSM, the Republicans have not really been in power since 1932.

[Da Coyote]

Just charge us. We’re already paying health, education, and employment for a good percentage of their population. May as well do the rest.

[marktwain]

“Awww, poor Mexican government. Too bad, so sad.”

---

A lot of trouble south of the border is not good for us.

[dusttoyou]

From what I have read, Mexico isn't exactly running out of oil, its the stupes @ Pemex that can't do it right AND Pemex is the only one exploring, drilling or producing in Mexico. Maybe when it all goes to crap they'll let US oil companies come in a develop the fields efficiently.

Similar with the Ruskis.

[dcwusmc]

That’s what I’m thinking. But they have this law, you see, and they expect outsiders to respect THEIR laws... and until they change it, no outside investment.

[Kaslin]

You have to read the editorial. It seems he has the same problem as the House has with Pelosi

[dcwusmc]

To be sure. But I can TEMPORARILY bask in the reflected glow of their incompetence and stupidity, can’t I?

[bilhosty]

We are in power because we have the White House. Why aren’t they at least trying? Why didn't they use there legislative power to find new sources? As for the power of the MSM what is the GOP doing to break it? why aren't they going to there money bags and telling them to find and finance a couple of new Rupert Murdochs’s? Why aren't they lining up buyers for the next sale of McClatchy? why aren't they using the FCC to undermine the networks? Why are they doing absolutely nothing?They still could of gone over their heads couldn't they. there is simply no excuse for not doing anything. If they are gong to lose at least they could go down fighting.

[Kaslin]

You are getting of the subject which is oil

[okie01]

what happened to that huge find in the gulf that Mexico was going to do the drilling for?

Pemex doesn't have the technology, the resources or the expertise to exploit it.

And foreign investment in Mexican petroleum production is forbidden by law.

You could view it as a lesson in where protectionism leads...

[SAJ]

No surprise. Same thing's happening in Russia since they've clamped down on their own oil entrepreneurs and kicked out most of the Western companies that know what's what and how to do it.

State-run oil companies have ALWAYS been fiascoes, going back at least to the 1910s, unless the crude is so shallow that even a moron like Gork would know how to lift it.

[airborne]

We can always burn caribou in our fireplaces! (sarcasm)

[marron]

Most government oil companies are hopeless. They make up for it by bidding out concessions to foreign investors, which is to say, foreign oil companies by and large.

The foreign investor pays a huge sum up front for the right to invest a huge sum of money exploring, drilling, developing. They pay a generous split of whatever they make to the host government, get taxed on their half, and at the end of the agreed time period they hand the whole thing over to the host government. The government, then, either operates it themselves or put it back up for bid.

Its a win-win-win for the host government, who gets to make money on the concession without putting anything in themselves, and they are insulated from the corruption in their own government oil company.

The terms of the divorce are written in up front, so the investor can calculate all of that in from the beginning. Even so, some countries will try to change the rules after hundreds of millions have been invested, and if you don’t like it, what are you going to do about it? The oil business isn’t for the faint of heart.

Mexico has the worst of all worlds. They mostly don’t allow foreign investment in their oil industry. So they are completely exposed to the full effects of government inefficiency, waste, politicized planning, corruption, without outside investors to ameliorate the situation. Without private investment, most government oil operations go down, down, down year after year.

[Steve Van Doorn]

Thank you