Bush says Mexico needs private money in energy sector

[IDemo]

Reuters - Wed Mar 7, 2007 12:51PM EST

MEXICO CITY (Reuters) - President Bush urged Mexico on Wednesday to seek private investment to boost state-run oil monopoly Pemex's efforts to explore for oil in deep waters of the Gulf of Mexico.

Bush, due to visit Mexico next week, said the country would win out from permitting extra investment that could accelerate crude oil production projects to meet growing global demand for energy.

"Mexico has a valuable asset in the energy sector, and demand for that energy is important," Bush told the Reforma newspaper in an interview.

"As we well know, as Mexico expands its oil production into deeper waters in the Gulf of Mexico, it will require even more capital," he said in comments translated into Spanish.

http://www.reuters.com/article/politicsNews/idUSN0724153020070307

[enid602]

1. Mexico

Mexico's in trouble; production down almost 25% this year on it largest field. Any dimunition of oil revenuse will wreak HAVOC on the Mexicand economy.

[nadinbrzezinski]

2. Mexico has reached peak oil

the ugly little secret

[silverweb]

3. If Pemex is smart...

It will expand into solar/wind/wave energy, which will benefit the entire economy and the environment.

I'm hoping.

[enid602]

5. Mexico

Yes, as should we, but unfortunately Mexico's paper-thin safety net is overly-dependent on oil revenues which are in a free-fall. Look for political instability and huge migrations northward. More reason to have a President who really understands the situation, and can work with Mexico to find solutions, rather than build border walls and concentration camps.

[David Zephyr]

4. Bush is warming up for his post-prez job gating capital to Mexican energy markets.

It's the essentially same job his father had in Texas the 1950's and 1960's where he pimped cheap Saudi and Kuwati oil against Texas oil. It's also the reason Texas oil men supported Lloyd Bentsen over Bush when he ran for U.S. Senate.

[Javaman]

6. It's actually very amusing to watch the oil men dance as fast as they can...

and spin themselves into a frenzy. :)

Warms my heart.

[Nihil]

7. Suspect some unfortunate editing of the headline ...

They seemed to have missed off the "... like a hole in the head" bit ...

[Oerdin]

8. For once shrub is right.

Mexico does need more investment in the oil sector but the Mexican government would never allow it. Mexico has this fear that foreign companies doing business in their country some how equals imperialism plus oil is a touchy subject since it has twice been nationalized in that country. One thing is absolutely certain though, the Mexican government has used Pemex as a cash cow to keep taxes low but they've taken so much money out of the company that it can't afford to pay to maintain its existing fields much less invest billions into new fields. Think about it, even with record prices the Mexican politicians take so much out of the company that it can't meet its business needs.

If governments are going to own businesses then there must be a 100% firewall to prevent politicians raiding the companies or forcing them to hire unnecessary workers. In France (and the UK in the 1970's) politicians routinely forced state owned companies to hire more workers, even if they didn't need them and couldn't afford them, during the run up to an election. The idea would be to make the politicians look good and get big headlines but this practice ruins companies.

[XemaSab]

9. Aren't there Mexican companies with the capital to invest?

Why does it have to be American companies making the profit? :shrug:

[razzleberry]

10. time horizon of the investor

investment makes no sense.

no investment, will make money in six years.
so a person with a political life of six years,
such as the President of Mexico,
is better off milking the cash cow.

edit for spelling