World beats a path to Mexico

Mexico is moving out of the bush leagues of world oil producers and into the majors -- and suddenly it is being courted as if it were a star pitcher or hitter.

Hotels here are overflowing with foreign trade missions offering technology and knowhow for Mexico's development needs, but with an eager eye on some of the oil.

It is all a rather heady experience for Mexico and Mexicans. They are, however, getting used to it -- and "liking it very much," as an official in the Ministry of Foreign Trade admitted recently.

Behind this new experience is, of course, oil, which Mexico has in such abundance that it can now play an increasing role in the world economy.

"Mexico is now truly a petroleum power," says Jorge Diaz Serrano, the director general of Petroleos Mexicanos, the state oil company more generally known as PEMEX.

The dimension of Mexico's oil potential is becoming abundantly clear:

* Proven reserves here now total 50 billion barrels, thanks to discovery of vast quantities of oil and natural gas in the past six years. This means Mexico is in sixth place among holders of the world's large oil reserves, which puts it on a par with Iran and Kuwait.

* Production has more than doubled within four years -- from 929,000 barrels in 1976 to an average of 1.9 million in 1979. In 1980 the production forecast is 2.7 million by the end of the year.

For a time, there was an inclination on the part of some oil people in the United States to play down the Mexican oil finds and to argue that the Mexicans were inflating their figures.

Although some still feel this way, many foreign oil people here suggest that PEMEX may now be the one that is downplaying its finds. Proven reserves may be substantially higher than Mr. Diaz Serrano announced in mid-March when he set the 50 billion tally, some foreign experts say.

Although the proven reserves represent the amount of petroleum Mexico says is definitely there for the taking by known techniques of extraction, Mexico claims it has almost 50 billion barrels more in probable reserves and 200 billion in potential reserves.

This assertion, accepted by responsible oil specialists, is based on surveys covering a mere 10 percent of Mexico's land and sea area.

There are numerous oil geologists, both Mexican and foreign, who think Mexico's reserves in the ground and under the ocean floor actually are much higher -- so high that they could rival Saudi Arabia's known reserves. Saudi Arabia has both the highest-known present resources in the world and the highest production of any single nation.

But if PEMEX feels this could be the case, it is not saying.

High officials in PEMEX, when asked about this possibility, will only smile. One says, "Time will tell."

Whatever Mexico's total reserves eventually prove to be, it has enough oil and natural gas now to attract a wide variety of other countries eager to purchase the Mexican black gold.

Production in mid-1980 -- more than 2 million barrels a day -- is great enough that roughly half can go into the export market. At the start of 1980, about 700,000 barrels a day were exported. Now production is close to 850,000 barrels, with about 75 percent going to the United States.

1 | 2

Next