Mexico is expected to squelch any Reagan hopes of more oil
As Ronald Reagan's energy advisers try to determine where the United States is going to get all the petroleum it needs in the coming years, there is a natural inclination to look at neighboring Mexico's burgeoning oil reserves.Skip to next paragraph
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But before they, or anyone else in the US for that matter, become optimistic about those Mexican reserves helping to bail the US out of its energy crisis, they should take a second look.Actually, it will take some doing by the incoming Reagan Administration to get more Mexican oil than the US already receives.
Mexico, today the world's fifth largest oil producer, simply does not want to increase either its total daily production of 2.5 million barrels or the 900,000 barrels sent to the US each day.
In part the Mexican attitude is based on wanting a greater variety of markets for Mexican oil and natural gas rather than concentrating on one or two; in part it springs from a desire to keep production at current levels for the next five years or so in order not to fuel inflation on the home front with no many petrodollars.
For US energy people, however, the presence of all that oil so close to the US -- 60 billion barrels of proven reserves and another 350 billion barrels of possible and potential reserves -- is mouthwatering. Despite repeated Mexican indications of unwillingness to be the answer to the US energy problem, the hope that Mexican exports will continue their meteoric increase keeps surfacing in the US.
In the past four years, Mexico expanded petroleum exports 1,400 percent -- to about half the daily production of 2.5 million barrels. From a modest 90,000 barrel daily export total in 1976, Petroleos Mexicanos (PEMEX), Mexico's national oil enterprise, has boosted its shipment of oil and natural gas to 20 foreign nations to about 1.25 million barrels daily.
But that seems to be about as far as either production or export increases will go.
"Any further increase in production and in exports," comments PEMEX chief Jorge Diaz Serrano, "should be considered only on a long-term basis."
The PEMEX official was speaking earlier this month to a group of Japanese oil specialists who want Mexico to raise daily exports to Japan from the present 100 ,000 barrels to 300,000 barrels in 1982.
"A very limited increase is possible," says Mr. Diaz Serrano. But he adds that, in the case of Japan, it all depends on the extent of Japanese economic cooperation with Mexico --has been suggested.
The PEMEX chief did not say so, but other Mexican officials have said the same condition of economic cooperation holds true for the US, and even then there will not be much of an increase. Mexico simply does not want all of its oil going to one single country. It wants market diversity and some Mexicans argue Mexico has too much of its oil going to the US already.
The Mexican government, meanwhile, is watching the words and actions of Mr. Reagan's transition team carefully to determine the President-elect's stand on a variety of bilateral issues.
While the issue of energy is not likely to be a formal part of the Jan. 5 meeting between Mr. Reagan and President Lopez Portillo in the Mexican border town of Ciudad Juarez, it certainly will be on Mr. Reagan's mind -- and it could well come up in the session.
Reagan people look with enthusiasm on the possibility of acquiring more Mexican oil. They indicate privately they believe that Mexico can be persuaded to increase its oil exports to its northern neighbor. And they believe that Mr. Reagan will be able to come up with persuasive arguments to do so when he gets down to serious talk with Mr. Lopez Portillo.