Petróleos Mexicanos, known as Pemex, has long been the third rail of Mexican politics. The state-owned company, originally based on oil fields seized from foreign owners over 70 years ago, has produced sizable government revenue and union jobs for hundreds of thousands of Mexicans. Foreign investment has been largely restricted.
But now Pemex’s main asset, the giant Cantarell offshore field, is shrinking fast. The company says it needs to boost annual investment by 46 percent, to $37 billion, to tap undeveloped shale-gas deposits and deep-water reserves. Without some private capital and expertise from abroad, Mexico risks becoming an importer in the next decade. Many of Mexico’s politicians and policymakers have known this for years. Yet Mexican nationalism, resistance from the unions, and the sheer size of the task of transforming Pemex have stood in the way.