Skip to comments.Mexico’s Oil Crisis Deepens
Posted on 11/27/2018 9:07:01 AM PST by bananaman22
Mexicos state oil company Pemex said it produced an average 1.76 million bpd of crude in October, down 7 percent from October last year, Reuters reports, citing data released by the company. This is also one of the lowest monthly production rates since 1990 when records began.
The decline was attributed to the natural depletion of mature fields, highlighting the urgent need for new production in the country. The outgoing government of Enrique Pena Nieto launched a sweeping reform in Mexicos energy sector, one of its aims being to open up the local oil wealth to foreign operators in order to stem this decline in production. The incoming government is currently reviewing oil contracts signed by the previous administration to make sure no corruption was involved in the deals.
(Excerpt) Read more at oilprice.com ...
Open it up to foreign money, only to be nationalized again when the next socialist government takes over.
Has anyone considered this for a minute?
If you lower cost, but increase quantity, don’t you make up for the lower cost?
I think the question is, what is the rock bottom break even cost to make a gallon of gas from a barrel of oil? If the politicians would get their hands out of taxing gas, then consumers would INCREASE use if the cost were low.
SO, you get lower transportation costs for trucks, trains, airplanes etc. Higer consumer use in travel, buying produce, and hard items shipped via train or truck.
You have increase travel for vacations driving etc.
IN OTHER WORDS, HAS ANYONE THOUGHT THAT MAYBE EVERYONE STAND TO WIN, WITH LOW GAS. WHEN I SAY LOW, I MEAN LIKE $1.00 OR LESS A GALLON.
Mexico has been robbing PEMEX for decades. Deferring maintenance on existing production facilities, lack of exploration... etc. Just Politicians killing the goose that lays the golden egg, it’s what they do.
“to make sure there’s no corruption?” Now that’s funny. The Mexican government is where politicians can go to learn how to be corrupt.
Production of product would end well before gas could reach a $1.00 a gallon. Hell, if gas was FREE you’d still pay 40 cents a gallon in taxes.
Profit margins are very thin at $55 a barrel and no profit for most operators at $50 a barrel.
“If you lower cost, but increase quantity, dont you make up for the lower cost?”
Maybe I should have just written: You can’t make up a loss by selling more product at a loss.
“The incoming government is currently reviewing oil contracts signed by the previous administration to make sure no corruption was involved in the deals.”
To make sure the new government gets it’s fair share of the graft.
Can’t let the old boss not leave anything on the table for the new boss.
So? Who cares?
It comes down to my first question, what is their absolute break even point. I’ve heard $55, but is that true?
I don’t think one barrel yields much gasoline, but then again, I’d like to know the facts. Maybe I’ll just ask Siri.
Until we up our refinery capacity, it’s a moot point unless we start importing way more gasoline.
Thats why the 50s and 60s economies were so good. If it were not for LBJs little war, the 60s would have been a big economic boom time.
Canadian oil sands oil (on wholesale market) was almost free a month or so ago, since there was no way to transport it out of Alberta.
Some wells produce very light liquids called condensates, which produce little gasoline.
So if a well produces oil too thick or too thin, not much goes to gasoline. Can be wildly useful in other ways though.
Figure that the “average” barrel of oil will yield about 10 gallons (varies widely), then you start to see the folly of Pemex’s battle to open up their fields.
It isn't just the oil or the gas, but the entire infrastructure needed to safely refine oil into usable form.
And in Mexico, who is the bigger thieves, the cartels or the government?
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