Global Oil’s Woes Come Home To Roost At PEMEX

3/16/2016 Forbes

pemex21MEXICO CITY — Back in August 2014, when Mexico passed the enabling legislation for an historic energy reform that opened its oil and gas sector to private sector investment for the first time since World War II, the market price for West Texas Intermediate (WTI) crude was just over $96 per barrel (pb) and hopes for the country’s energy sector ran nearly as high.

In markets—as in life—timing is everything, and the precipitous drop in global oil prices that began in October that year has required Mexico and its erstwhile national oil monopoly, PEMEX, to rein in spending to weather a period when sharply lower oil and gas revenues changed the country’s fiscal picture. About twenty percent of Mexico’s federal revenue is dependent on oil exports.

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