Jan. 20 (Bloomberg) -- Petroleos Mexicanos, Mexico’s state oil company, will probably report its fastest drop in production since 1942, eroding revenue as plunging crude prices limit the amount of cash available to drill for new reserves.
Pemex last year likely extracted 2.8 million barrels a day, down about 9 percent from the 3.08 million a day pumped in 2007, representing a total of $20 billion in lost sales, according to data compiled by the government and Bloomberg. The Mexico City- based company, which had revenue of $104 billion in 2007, plans to report annual production figures tomorrow.
Given Pemex's role in funding the government this oil production decline is going to create a Mexican government financing crisis. Mexico will cease to export oil in a few years and will become an oil importer. This will create financial strains on the government and economy.
The US government ought to take steps to insulate the US from Mexico's coming economic crisis. We should build a deep and long border barrier to keep out Mexicans when their living standards go into decline.
|Share |||By Randall Parker at 2009 January 20 11:24 PM Mexico|