It has been 75 years since President Lázaro Cárdenas seized the country’s foreign-dominated petroleum industry and placed every drop of oil under the everlasting domain of the Mexican people. But while it once was a source of national pride, the state-run monopoly he created — known as Pemex — has become a dinosaur, sapped by debt, sagging output and dated technology. The Mexican government siphons off the company’s revenue to cover about one-third of the federal budget, leaving insufficient funds for what has become a critical task: finding more oil.
Mexico remains the third-largest source of foreign oil for the United States after Canada and Saudi Arabia. But the country’s easy-pump crude is quickly running dry, and the company lacks the technology and know-how to drill for the vast stores of tougher-to-reach deposits that are thought to exist beneath Mexico’s deserts and seas. Fixing the company, Petroleos de Mexico, has become a top priority for Mexico’s new president, Enrique Peña Nieto. With an overhaul plan expected by late summer, U.S. and other global energy companies are waiting to see whether Mexico will once more give outsiders a crack at the country’s hydrocarbon treasures, including the massive, virtually untapped beds of shale gas south of the Texas border.