Pemex Outlines Oil Strategy to Face Challenges Near, Far

Faced with evidence that its crude reserves are in a downward spiral, oil powerhouse Mexico vowed Sunday to bolster its supplies of the fuel and improve the state-run industry’s operations to confront fierce world competition.

Raul Munoz, chief executive of state oil monopoly Petroleos Mexicanos, known as Pemex, said the oil giant faces a laundry list of challenges, from improving its reserves strategy to finding a legal framework to grant Pemex more flexibility.

“As we have signaled on other occasions, the new Pemex strategy will be focused along three main axes: the company environment, operating performance and hydrocarbon reserves,” Munoz said at a ceremony marking the 1938 expropriation of Mexico’s oil wells from foreign owners.

The pledges come as Mexico--the fifth-largest oil producer and ninth-biggest exporter--posted a 4% drop in proven reserves to 32.61 billion barrels at the end of 2000. For the year-earlier period, Mexico’s proven reserves were 34.1 billion barrels.

Probable reserves were tallied at 12.19 billion barrels as of the same date, Munoz said. The number is just above the 12.14 billion barrels reported by Pemex at the end of 1999.

Pemex, which officials said ranks as the world’s third-biggest oil company, has been seen as a symbol of Mexican sovereignty and independence since its creation after the nationalization of oil wells.

Munoz has repeatedly signaled that in order for Pemex to compete against such oil heavyweights as Royal/Dutch Shell Group and Exxon Mobil Corp., the government must loosen its fiscal noose around the firm. Pemex provides about one-third of the government’s annual income.