Mexican Energy Secretary Insists Mexico Has Ample Petroleum Supply

Text of report by respected Mexican business newspaper El Financiero website on 7 February

[Report by Esther Arzate: "Sener: There is plenty of petroleum, but we must extract it"]

Ku-Maloob-Zaap (KMZ) will enable Pemex (Mexican Petroleum) to sustain oil production “for a while” and offset the decline of Cantarell, Mexico’s largest oil deposit, Energy Secretary Georgina Kessel has acknowledged. She said that the federal government is seeking to prevent the parastate company from deteriorating by removing its straitjacket so that it can become a pace-setting enterprise in the international arena.

She went on to say that crude oil production in recent years has declined between 200,000 and 300,000 barrels a day and that another drop of 200,000 barrels is expected in 2008. She emphasized, however, that Mexico has around 100 billion barrels of equivalent crude oil (consisting of proven, possible, and probable reserves, as well as prospective resources), which are enough to meet the country’s energy requirements for the next 60 years.

Mexico has “plenty of oil, but we need to find ways of turning these reserves into production and into resources for the Mexican people,” she said, adding that the challenges facing Mexico’s oil company involve not just financial but technological and operational resources as well.

Interviewed at the close of the inauguration of the Siemens company’s Exiderdome technology fair, Kessel declined to discuss the possibility that the administration’s bill to amend the legal framework of the energy sector may call for the involvement of private capital in the industry. She merely reiterated that solutions must be found to the problems facing Pemex.

She also stressed that Pemex would not be privatized, that not a single piece of the company would be sold off, and that the State would retain ownership over hydrocarbons. However, she sidestepped questions about a possible oil crisis owing to the decline in petroleum production and about partnership arrangements between Pemex and private firms.

The Energy Secretariat is providing the Legislature with the technical know-how to develop a common diagnosis so that “we can set in motion the solutions that will enable future generations of Mexicans to continue taking advantage of their ownership of our oil wealth,” she noted.

She asserted that the Legislative and Executive branches are in agreement about the problems facing the sector, which involve not only the declining production of crude oil but also rising imports of oil products. For example, 4 of every 10 litres of gasoline consumed in Mexico are purchased overseas.

There are two options for dealing with this situation, she said: either keep things as they are, in which case “we are going to continue importing gasoline and creating well-paid jobs elsewhere in the world, or else provide available options on the premise that hydrocarbons belong now and will continue to belong to the Mexican people.”

Originally published by El Financiero website, Mexico City, in Spanish 7 Feb 08.

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