"It was the first great nationalisation of oil outside the Soviet Union and created the first major national oil company. Women queued to donate jewellery and chickens to pay the bill. It shaped the nation's evolution, with oil sustaining a near one-party state for 71 years. But now Mexico's March 18, 1938, nationalisation may be on its way out.
Indeed, an unaccountable state within a state, providing a third of government revenues, Pemex arguably distorted the whole course of Mexican democracy.
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The country's most promising new exploration province is the Gulf of Mexico. Shell and others have found oil in 3,000 metres of water, the deepest producing wells in the world, just over the US side of the border, but Mexico has barely ventured into these deep waters.
The case for reform has long been clear, but was blocked by Pemex's powerful trade unions, the company's ties to state governments, and by the constitution's commitment - still passionately backed by many Mexicans - to national ownership of mineral resources.
Source: TheNational
Indeed, an unaccountable state within a state, providing a third of government revenues, Pemex arguably distorted the whole course of Mexican democracy.
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Mexico's President Enrique Peña Nieto, is hoping to end Pemex's monopoly before the year is out. It's essential he succeeds as the company's failings are holding back the whole economy.
Production has dropped year since 2004 as Pemex's flagship, Cantarell, once the world's second-biggest producing field, went into steep decline.
Falling Mexican output helped to undermine non-Opec production and drive the price boom of the past decade.
Mexico could become a net oil importer by 2020, while despite its hydrocarbon riches, it imports a third of its gas, mostly from its northern neighbour.
The famous Eagle Ford formation, one of the US's two leading shale oil plays, extends across the border from Texas. Yet Mexico, which could have the world's sixth-largest shale gas resources, has drilled just 15 wells; more than 4,000 wells were permitted in the Texas Eagle Ford alone last year.
The country's most promising new exploration province is the Gulf of Mexico. Shell and others have found oil in 3,000 metres of water, the deepest producing wells in the world, just over the US side of the border, but Mexico has barely ventured into these deep waters.
The case for reform has long been clear, but was blocked by Pemex's powerful trade unions, the company's ties to state governments, and by the constitution's commitment - still passionately backed by many Mexicans - to national ownership of mineral resources.
Mr Peña Nieto has to keep a tricky coalition of Mexico's three largest parties together to pass reform of oil and the voting system.
It's likely under his plans that the state would still own the oil, while sharing profits with private investors in shale and deep-water exploration".
Source: TheNational
