PEMEX REFORM: Ominous signs
There are ominous signs for the government in its attempt to reform the state-owned oil company, Petróleos Mexicanos (Pemex). The main problem is that the Partido Revolucionario Institucional (PRI), which holds the balance of power in congress, has sensed that it can make political capital out of the reform.
The PRI is showing signs of recovering its political nerve. Two key PRI powerbrokers, Elba Esther Gordillo, the leader of the teachers' union (the SNTE) and Carlos Romero Deschamps, the leader of the oilworkers' union, have announced an alliance. Gordillo and Deschamps are far more than union leaders. Gordillo has run the SNTE for years and even set up a new political party, the Partido Nueva Alianza, for the 2006 elections when she fell out with the-then leader of the PRI, Roberto Madrazo. In 2006, Deschamps was behind a last ditch effort to shift money from Pemex to the PRI in order to finance the party's desperate attempt to prevent Vicente Fox from winning the election.
Gordillo was heavily involved in Fox's attempt to reform the energy industry. She also believes that her support was crucial to the presidential victory of Felipe Calderón Hinojosa in 2006. Armed with this belief, she now feels she has the power to veto some of his policies, particularly on education reform.
Overall the PRI has moved from being broadly supportive of the government's plans to being non-committal. On 27 May the party announced that it wanted the reforms to be decided during the next formal session of congress, which starts in September. The government, and the leftwing opposition, the Frente Amplio Progresista (FAP), had expected the reforms to be approved during the current extraordinary session.
The FAP is also pushing for congress to allow a referendum or plebiscite on the government proposals. Neither referendums nor plebiscites are envisaged by the Mexican constitution. It is not clear whether the FAP wants a referendum or a plebiscite to be binding.
Oil production: In the first four months of the year oil production fell by 9% year-on-year. Production averaged 2.8m bpd in the first months of 2008, compared to 3.1m bpd in the same period of 2007. Pemex's six refineries produced an average of 1.5m bpd of oil products. Cantarell's production was down by 416,000bpd. Only part of this decline was covered by increased output by Ku Maloob Zaap, where production rose to 670,000bpd in the January-April period, from 476,000bpd in the same period of 2007.
Oil exports totalled 1.4m bpd in the first four months, down 13% down on the 1.7m bpd sold in the same period of 2007. However, amid higher oil prices, export revenues rose 52% year-on-year.
The average export price in 2008 was US$85.7 a barrel, up 73.5% on the same period of 2007. For most of May, the export price of Mexico's predominantly heavy crudes was over US$100 a barrel.
- Pemex reforms
The 71 days of national debate, led by congress, on the government's proposed reforms to Pemex began on 13 May. The debate, which was demanded by the leftwing Frente Amplio Progresista (FAP) and its radical leader, Andrés Manuel López Obrador, attracted little public interest.
- GDP
Mexico's GDP in the first quarter was M$11.5 trillion, according to the
official Instituto Nacional de Estadistaca e Informatica. As the exchange rate
is M$10.5 to the dollar, Inegi said that for the first time ever Mexican GDP
exceeded US$1 trillion. The Inegi added that the country's GDP per capita was
now US$10,453, putting it comfortably ahead of Brazil, the only other Latin
American country with GDP above US$1 trillion.