Mexico's Energy Reform: Ending The Inertia

摘要

A key aspect in understanding the troubles of Mexico's oil and gas sector is the federal government's high budget dependence on the revenues of the National Oil Company (NOC) Petroleos Mexicanos (Pemex). Through heavy taxation the company has been recently funding 32-35% of the federal government's expenses and as a result has been left with a limited budget for any significant reinvestment strategy. As a consequence, in the last 10 years Pemex has faced increasing difficulty in both managing a decline of its total production and successfully exploring and developing additional hydrocarbon reserves. In addition to these constraints the subject of oil in Mexico is highly ideological and political. Any topic related to hydrocarbons is connected to a nationalistic interpretation based on the 1938 expropriation. The Mexican constitution incorporates these principles by securing state exclusivity in managing the hydrocarbon resources.