Official: Mexico spending on oil exploration rising, but problems in infrastructure remain
Mexico’s state-run oil monopoly will spend more than $13 billion, on oil exploration, extraction and production this year – but its outdated infrastructure system remains a serious liability, a presidential spokesman said Friday.
Ruben Aguilar said state-run oil company Petroleos Mexicanos’ 2005 budget for recovering and readying new oil for the market represents more than double the amount spent on those activities five years ago.
In 2004, Pemex’s daily production was nearly 3.4 million barrels of crude oil, the highest in Mexican history, Aguilar said. Carlos Morales, head of exploration and production at Pemex said this week production reached 3.4 million barrels a day of crude between April and June.
Pemex is one of the world’s biggest oil producers and a top supplier of crude to the United States.
The oil monopoly gives about two-thirds of its revenue to the Mexican government to cover taxes and royalties, an arrangement that often leads the company to report net losses. But high crude prices bolstered Pemex’s second-quarter results, even as the company’s production levels held steady and exports declined to 1.8 million barrels a day, a 3 percent drop compared to the same period last year.
When asked about a series of accidents that have injured and killed Pemex employees and contract workers as well as caused environmental problems in recent months, Aguilar said “it’s absolutely right that the platform and infrastructure of Pemex is obsolete.”
Pemex has announced measures to improve its infrastructure.
“Specifically, the pipelines are more than 20 years obsolete,” Aguilar said.
About 40 percent of the country’s 35,000 miles of pipelines are damaged or corroded. Many of those pipelines were built during the last oil boom, in the 1960s and 1970s.
Congress has approved only about one-third of the annual funds needed to maintain and upgrade the most antiquated ducts, officials say.
Also Friday, Aguilar refused to say if Mexican President Fox would sign tax rules for Pemex passed by legislators in June. The bill would give the oil concern a lower tax rate on oil and gas production from new projects, freeing up money for more investment.
Pemex estimates the new tax code will save it more than $2 billion in 2006 and as much as $13 billion over four years.
More: mywesttexas.com
Official: Mexico Spending on Exploration Up
Mexico's state-run oil monopoly will spend more than 137 billion pesos (US$13 billion, euro10.5 billion) on oil exploration, extraction and production this year - but its outdated infrastructure system remains a serious liability, a presidential spokesman said Friday.
Ruben Aguilar said state-run oil company Petroleos Mexicanos' 2005 budget for recovering and readying new oil for the market represents more than double the amount spent on those activities five years ago.
In 2004, Pemex's daily production was nearly 3.4 million barrels of crude oil, the highest in Mexican history, Aguilar said. Carlos Morales, head of exploration
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