What does the future have in store for PEMEX?

The decline of PEMEX in recent decades is the result of there not being a long-term institutional strategy to consolidate it
What does the future have in store for PEMEX?
PEMEX platform – Photo: Juan Carlos Reyes García/EL UNIVERSAL
07/06/2018
08:59
Mexico City
Newspaper Leader by EL UNIVERSAL
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Mexico's history in the last century has been linked to the oil industry. Since it was expropriated 80 years ago, Petróleos Mexicanos (PEMEX) has been part of the economic and industrial development of the country. In the late 70's, the boom after the discovery of the Cantarell oil field seemed the door to end decades of lack of progress in several sectors of the population; poor administrations kept this from happening.

Thus far in this century, due to the fiscal demands required by the law to this industry, there was no more investment for infrastructure and modernization. Sooner rather than later came the decline, the end to the “goose that laid the golden eggs,” as it was said in this administration. All the above was the main argument for the approval of the energy reform and the entrance of private capital (foreign or domestic) into the oil industry.

Despite PEMEX has lost some weight in the national economy, it continues being key as a productive state-owned company. For this reason, the presidential candidate who wins next July 1 has to have a detailed plan to prevent this company from further declining; on the contrary, it needs to be strengthened and its importance has to be restored at an international scale.

During an interview with EL UNIVERSAL, the director of the company points out that they are prepared to work with whoever becomes the winner. The company is expected to present this month their 2018-2022 business plan so the candidate can become familiar with it. Anyone who arrives at the Presidency should review all legal and technical matters and analyze how to put it into motion or improve it.

If any cause can be attributed to the decline PEMEX suffered in recent decades is of having been the victim of the criteria of the administrations in turn, mainly in fiscal matters, instead of adopting a long-term institutional strategy to consolidate it. Although we can't deny there are still matters to resolve regarding transparency and cuts in unnecessary expenses, in some cases from its high management levels.

It's vital that the new administration taking office this December 1 understands that the management of industries such as the oil one cannot be subjected to the whims of politics. Defining a clear and ambitious route for the development of PEMEX should go beyond any ideology. Mexico and its people would be the greatest beneficiaries of this.

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