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Less than full disclosure: Pemex

16 August 2013

At the beginning, Peña Nieto said that privatization is justified by the organization’s situation. But, surprise, surprise, this is also doublespeak, given that to the outside world, the Government is offering an unrealistic image of the current state of Pemex “in Mexico and globally”, as well as “the return on investment in Pemex.”

Adolfo Sánchez Rebolledo in La Jornada on the intellectual dishonesty of the marketing (and PEMEX1there is no other word for it) of Pemex “reforms”. A translation, by Stuart Taylor, was posted on the Mexico Voices blog.

Some friends sent me a document from Pemex that has been broadcast on social networks aimed at potential investors in Mexico and abroad (ExpoForo Pemex). Written in July 2012, the text is the opposite of the pessimistic attitude of the current government, which uses the disarray in which Pemex finds itself as justification for privatization. It uses that self-prophecy, woven over the years, to convince Mexicans that there is no better path than re-opening the doors to private capital in the energy industry. In order to achieve this, initially they unsuccessfully fought “constitutional taboos”, unfairly ridiculing them as relics incompatible with modern times.

Given that this had no effect, they now put forth rejected slogans, repeating word for word, from Peña Nieto on down, that the presidential initiative is nothing more than a repetition of the original 1940 vision of President Lázaro Cárdenas.

Make no mistake about it, the “reforms” are intellectually dishonest. On the one hand, we’re told Pemex is broke, and won’t survive without foreign capital. On the other, foreign investors are being told Pemex is a sure fire money-maker.

We’re told Pemex is going broke because it allocates too much money to the government. How we’d be better served if the profits are shelled out to foreigners isn’t said.

And, of course, Pemex isn’t broke, and the only reason it needs to expand capacity is to serve foreign oil (i.e. U.S.) demand. Given that Pemex is a natural resource management company, in reality, it doesn’t have to export oil at all… we were promised six new refineries in the last administration, none of which is yet on line, and as far as I can tell, only one of which even saw the start of construction.

… Pemex is the 13th most successful company in the Americas and 34th in the world. Furthermore, it has been the fourth largest world producer of crude oil since 2008, the third largest exporter of crude oil to the U.S. and has the 13th largest total reserve of crude oil – “a strong position considering the company’s organic growth.” And for the record, Pemex ranks 14th in total profits, “with over 100 billion dollars made in sales.” Additionally, the text indicated, “Pemex’s profits are comparable to the five most profitable companies on the consumer price index… demonstrating a good cost structure and operational efficiency.”

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