Mexico’s oil problem

In 1938, Mexico nationalized its oil industry which is seen by many as a watershed moment in history. Many believe oil represents Mexican sovereignty. Oil represents 40% of the revenue for Mexico’s budget, but Mexico’s oil industry is deeply in debt despite a lot of revenue from last year. This energy analyst says Mexico’s oil industry is distributed across state governments and there’s no accountability for how it’s spent. Production has fallen by 50% in less than four years and President Calderon wants to bring in companies with deep water exploration expertise because vast amounts of crude lie deep in the Gulf of Mexico. But prospects for making that through government debate are slim, as some politicians are worried about privatization of their oil industry. This analyst says there is some posturing on all sides about who will succeed President Calderon and how that might affect Mexico’s oil industry. He says one obstacle to foreign cooperation is a lack of trust in Mexico towards private investment.