Manyana May Be Worse for Mexico
jimrogers.com
Unfortunately, Mexico is running out of oil. Between 1990 and the end of 2000, proven oil reserves fell from 52 billion barrels to about 26 billion. Little investment is being made on new exploration and production -- an absolute necessity when you have such declining reserves. Abu Dhabi, the oil-rich nation in the United Arab Emirates, also has declining reserves but with a tiny population, those reserves will allow its people to live on what is left for the next 100 years. Mexico, with a population over 100 million, does not have that luxury.
........................................................................
I am bullish on oil, but even a bull market in oil will not save the country as its reserves decline. Recent governments haven't funneled enough resources into exploration and development. Likewise, little effort has been made to expand the country's refining operations, which are meager at best. In fact, Mexico imports most of its refined products, like gasoline and fuel oil. Pemex may be happy when oil prices go up, but consumers actually suffer! Experts estimate that by 2010, Mexico will have to import nearly a quarter of all the gas it consumes. |
