Pemex

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Petróleos Mexicanos
Type Government-owned corporation
Founded 1938
Headquarters Flag of Mexico Mexico City, Mexico
Key people Jesús Reyes Heroles (CEO)
Georgina Kessel (Chairman)
Industry Oil and Gas Refining
Products Petrochemical products
Revenue image:green up.png$98 billion USD (2006)
Employees 138,215
Website http://www.pemex.com.mx
A Pemex gas station in Puerto Vallarta
A Pemex gas station in Puerto Vallarta

Petróleos Mexicanos (PEMEX) is Mexico's state-owned, nationalized petroleum company.

Asphalt and pitch had been worked in Mexico since the time of the Aztecs. Small quantities of oil were first refined into kerosene around 1876 near Tampico. By 1917 commercial quantities of oil were being extracted and refined by subsidiaries of the British Pearson and American Doheny companies, and had attracted the attention of the Mexican government who then claimed all mineral rights for the state as part of its Constitution.

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[edit] Expropiación Petrolera

Information Zona Petrolera

In 1938, President Lázaro Cárdenas sided with oil workers striking against foreign-owned oil companies for an increase in pay and social services. On March 18, citing the 27th article of the 1917 radical constitution, President Lázaro Cárdenas embarked on the state-expropriation of all resources and facilities, nationalizing the U.S. and Anglo-Dutch operating companies, creating PEMEX. In retaliation, many foreign governments closed their markets to Mexican oil. In spite of the boycott, PEMEX developed into one of the largest oil companies in the world and helped Mexico become the fifth largest oil exporter in the world.

[edit] Products

PEMEX is the sole supplier of all commercial gasoline (petrol/diesel) stations in Mexico. All petrol stations, although labeled PEMEX, are concessions that are strictly full-service. PEMEX tried to take away the concessions from a large number of these for low-quality gasoline (often cut with up to 40% fuel oil) and for not serving the correct amount of gasoline (many serve only 9 litres for every 10 registered on the pump), however a judge ruled these were "not reasons to take away the concessions".

The grades of PEMEX gasoline are 'Magna' (Regular Unleaded 87 octane - green pump handle) and 'Premium' (92 octane - red pump handle). Previously, PEMEX offered a leaded gasoline called 'Nova,' but this has been discontinued for environmental reasons (Nova gasoline, like many other leaded gasolines, have been discontinued due to stringent health regulations).

Although PEMEX accepts Mexican Pesos and U.S. Dollars (and fills vehicles in liters), the gas is charged in pesos. In November 2005 it was decided that a tax invoice for gasoline would only be issued when payment was made by credit card. However, not all stations are able to process credit card payments.

[edit] Controversy

Customers have complained about the alleged fraud committed by some gas stations, which consisted in selling "liters" of less than 900ml (leading to some to refer to these "liters" as "chiquilitros"; i.e. "partial liters"). Pemex is not responsible for such frauds and has been recently taking measures to counter this problem.

[edit] Accidents

On June 3, 1979, PEMEX's Ixtoc I exploratory oil well in the Gulf of Mexico, about 600 miles south of Texas, suffered a blowout and became the largest unintentional oil spill in history.

On November 19, 1984 a series of explosions at the PEMEX petroleum storage facility at San Juan Ixhuatepec in Mexico City ignited a major fire and killed about 500 people.

On 22 April 1992, explosions in Guadalajara, Jalisco killed more than 200 people.

[edit] Reserves

[edit] Chicontepec Field

Chicontepec Field

[edit] Cantarell Field

Cantarell Field

[edit] Ku-Maloob-Zaap

[edit] Current situation

PEMEX, despite its current $77 billion in revenue, pays high taxes that contribute with a large portion of the budget of the federal government. Indeed, in recent years the company has only been able to make ends meet through massive borrowing, so that it now owes a staggering $42.5 billion, including $24 billion in off-balance-sheet debt because the Mexican government treats the company as a major source of revenue. The state-run company pays out over 60% of its revenue in royalties and taxes, and those funds pay for a third of the federal government's budget. If oil prices drop or there are no major new discoveries of crude, that could spell big trouble for PEMEX despite its immense revenue stream and expansion prospects. However, in 2005, with record-breaking oil prices (due to the Iraq war, economic expansion of the United States and China) the company has seen an unexpected excess of funds. This tendency continued in 2006, but these funds have been used to pay salaries of bureaucrats and current costs, instead of being invested in projects of exploration and production; during President Fox administration, these funds represent around 70 billion dollars[1], yet the administration says there is not enough money to pay the debts. To help capitalize the company President Fox has brought forward the possibility of making shares of PEMEX available to Mexican citizens and pension funds, to complement a current project-specific investment setup known as "Proyectos de Inversión Diferida En El Registro del Gasto" or PIDIREGAS[2]; this proposal, along with alleviating PEMEX's heavy tax burden and a substantial budget increase, have met opposition in Congress.[3][4]

[edit] Post Peak?

In an interview on the oil news website www.oilcast.com in November 2005, a PEMEX employee spoke anonymously of the company's inability to grow production, stating that the company and country is at Hubbert's Peak. The person interviewed believed export levels could not be recovered once peak had passed, as the size of current fields that have been discovered or are coming online represent a fraction of the size of the oilfields going into terminal decline.

Furthermore, it has been reported the 2005-2006 daily oil production was down by approximately 500,000 barrels a day (a large proportion of the country's 4.5 million barrels) on the previous year. The importance of both of these statements cannot be underestimated and speak volumes for the ability of the world to continue to meet expected demand with increased supply.

[edit] References

[edit] External links

Pemex Crisis and Opprotunity (http://www.usaee.org/pdf/Nov06.pdf