Weekly Report - 9 March 2004

OIL & GAS | Pemex gushes over new record. Last week the state oil company Pemex reported that its net earnings of hard currency last year had come close to US$15bn, the highest such figure since 1985. Much of this was due to improved world oil prices, but an 8% increase in export volume, to 1.84m barrels per day, also played an important part. Production of oil reached 3.37m bpd, the highest level ever.

[Pemex's exports actually brought in about US$17bn, but the company had to spend some US$2bn on imports of fuels needed to cover about 25% of domestic consumption.]

There was also good news on the natural gas front. Production reached 4.5bn cubic feet per day, reversing the downward trend of the previous four years. Also, 41 new deposits were discovered, raising the rate of reserves replenishment to 45%, way above the 25% of the past decade.

MERCHANT MARINE | Investment way below requirements. This year about US$150m will be invested by Mexico to acquire 10 new merchant ships. This does not even begin to cover the needs of a merchant marine whose 280 ships have an average age of 25 years (far higher than the optimum of 15-20 years). According to Javier Villegas, president of Cameintram, the maritime transport chamber, the merchant marine would need about US$1bn to modernise its fleet.

The leading client of Mexico's merchant marine, by the way, is Pemex.