National Oil Company Pemex Is the Next Big Thing in Mexican Energy Reform Jennifer Hiller - San Antonio Express
go to original January 16, 2016

Workers perform maintenance on an offshore facility run by Mexico's national oil company, Pemex. (Susana Gonzalez/Bloomberg)

Mexican energy reform has been a breeze so far compared with what's around the corner: reorganizing state-owned oil company Pemex.

"We cannot talk about Mexico's energy reform if we don't talk about Pemex," Jorge Piñon, director of the Latin American energy program at University of Texas at Austin, said in a presentation last week. Pemex is the "800-pound gorilla" of Mexican energy reform - the uncomfortably large thing that no one talks about but can't be ignored forever.

Pemex, which has controlled nearly every aspect of Mexico's oil production and distribution since its creation in 1938, is about to get its first competition. Mexican officials decided in 2013 to open their oil and gas fields to foreign companies for the first time in 75 years.

Oil prices have cratered since then. Crude is now trading under $30 a barrel - down from as much as $107 a barrel about 18 months ago - and Pemex is hemorrhaging money like many in the industry. The energy giant, in fact, would likely be bankrupt if it were a private company in the U.S., Piñon said.

Read the rest at Houston Chronicle

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