Yeah right. That's less than Cantarell declined Jan-Mar. Oh, you Pemex yucksters!Speaking of which here's an anecdote posted at TOD on June 3:
Pemex
Some years ago I worked for about a year as a subcontractor for Pemex, so I think I have pertinent experience for commenting on Are monopolies holding Mexico back?.
I found working in a Pemex office a rather surreal experience. There are a lot of smart, competent people there. But there are also a lot of people who are totally incompetent, like the draftsman who happily admitted he knew nothing at all about drafting: he got his job simply because a relative was a union official.
Even the competent people tended to be very unproductive. Some of them were unproductive because they knew they had a secure job (because of their political or family connections) but most of them because to show initiative was to risk failure, and to risk failure was to risk losing your job. And if you are a Mexican professional in a petroleum discipline (such as petroleum engineering or the geosciences) the only potential employer is Pemex. Lose your job there, and you will have to change careers or emigrate.
Pemex is also chronically short of money, which means all kinds of shortcuts are taken, sometimes leading to accidents, but usually leading to waste of what money they do have: well bores lost due to poor quality casing or shortcuts in the mud program, dry holes due to inadequate seismic data, and projects cancelled before completion because there is no money.
In general, the overall atmosphere gives the impression that who you know is far more important than what you know. This is not necessarily part of being a monopoly, but the lack of competition certainly makes it easier for such an atmosphere to flourish.
Latin Business Chronicle: Pemex: No Speedy Recovery
Can Pemex reverse declining oil production by 2010? Four experts share their predictions.
David Shields, independent energy consultant based in Mexico City: Mexico's energy reform is a complex, well-intentioned piece of legislation, which tends to push Pemex in the direction mentioned by Paredes. It sets out a framework for restructuring the oil industry, for applying more flexible contracting procedures and for promoting a transition towards clean and renewable energy. The problem is that nobody is really committed to this reform. There is no enthusiasm, interest or urgency about putting it into practice. It is being implemented poorly and slowly, so the opportunities it offers are in danger of being lost. Yet, politicians and society at large do not seem to care less. President Felipe Calderon got most of what he proposed in the reform, but has repeatedly said that he does not like it, because Congress did not allow him to open up refining and fuel distribution to private investment. Owing to the rapid decline in output at Cantarell and to political and ideological excesses and corruption over the years, disenchantment with Pemex is overwhelming. As oil revenues fall, there is a lack of conviction that Pemex will be the solution to Mexico's problems, just [as] the global financial crisis whips the country. Profound ideological prejudice prevents meaningful debate on further reform that could engage direct foreign investment. So, despite upbeat official forecasts, signs are that declining oil production will not be reversed (though it may fall more slowly) and that no more reform will be forthcoming during the Calderon government. Beyond 2012, the outlook for output, investment and reform is unclear.
