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A Big Oil Find May Derail Reforms in Mexico

A Pemex discovery lowers the political pressure to change
Mexican President Felipe Calderón
Mexican President Felipe CalderónPhotograph by Ariel Guiterrez/EPA/Newscom

When Mexican President Felipe Calderón turned 50 last August, the head of the state oil company called with what he labeled “a great gift.” After years of deep exploration and almost $10 billion in investment since 2009, Petróleos Mexicanos (Pemex) made a big oil find in the ultradeep waters of the Gulf of Mexico. A week later, Calderón appeared at a press conference holding a flask of crude from the new site, the Trion field. Pemex is preparing to announce a second deepwater discovery in coming days, according to company executives.

The finds will bolster the legacy of President Calderón, who had overseen declines in crude output by Pemex every year since he took office in late 2006. But ultimately the discovery could derail an overhaul of the company promised by President-elect Enrique Peña Nieto, who assumes office on Dec. 1. Because Pemex’s petroleum production has dropped 25 percent from its peak of 3.4 million barrels a day in 2004, Peña Nieto called energy reform his “signature issue.” He promised to change rules that allow private and foreign oil companies to provide services to Pemex but ban them from owning stakes in Mexico’s oil and gas fields. Mexico depends on royalties from Pemex for about a third of its budget.