How easy will it be to turn around Pemex?

Not that easy.  Here is one excerpt from a generally interesting article:

The failure of Pemex and its government overseers to invest in the latest drilling and exploration technology is partly to blame for the decline. A critical issue for the future of Pemex is manpower. The company is overstaffed with unskilled workers whose jobs are guaranteed for life and understaffed with engineers and skilled laborers, says Marcelo Mereles, a former Pemex director and now a partner at EnergeA, a consultancy.

‘Cultural handicap’

“Pemex continues to have a very big cultural handicap,” Mereles says. “The government has converted Pemex into a very bureaucratic company that operates like a government office and not like an international oil company.”

Pemex’s ability to compete with foreign companies will also be hampered by deficiencies in Mexico’s educational system.

“We’ve all heard the excellent news about Mexico’s great potential in the energy sector, but the question is, who’s going to do it?” said Rangel, of the hydrocarbons commission. “We have few universities committed to oil production, petrochemicals, chemical engineering or physics. And we produce few engineers.”

Until now, petroleum engineers’ main potential employer in Mexico was Pemex, and they could earn more money abroad.

Of course it is hard enough to turn around bad, already-private companies.  The new reforms, allowing Pemex to undertake shared ventures with private partners (Chevron being one example on tap), are all to the good.  But Pemex itself is not about to suddenly become an economic tiger.  It is scary to hear this, although fortunately it is likely to prove wrong:

As President Peña Nieto put it to Pemex employees in March, “The energy reform is the most important economic change in Mexico in the last 50 years.”

Here is further information on the new energy reforms.


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