MEXICO CITY, July 29 (UPI) — After almost 13 years as the third largest producer in the world, Mexico’s Petroleos Mexicanos has dropped into fourth place.
Venezuela’s state-owned oil company Petroleos de Venezuela, S.A., more commonly referred to by its acronym PDVSA, claimed third place. Petroleos Mexicanos — Pemex — was regulated to the No. 4 spot.
The Statistical and Information Energy Intelligence Group’s “PIW Ranking 2011Global Report” said Pemex in 2010 produced 3 million barrels per day, while PDVSA managed to increase production over Pemex’s output by 170,000 more barrels per day, Mexico’s informador.com reported Friday.
Mexico has ranked eighth in the world in terms of proven reserves. Venezuela however, has established itself as having the world’s second largest reserves of crude oil in the world, only exceeded by Saudi Arabia.
The Oil and Gas Journal listed Venezuelan oil reserves at 20.2 times greater than those of Mexico.
Pemex reported Thursday that its net profit for the January-June period this year was $1.14 billion, its biggest profit since June 2008. The company cited surging crude prices and the fact that Mexican oil traded with a premium over the U.S. crude benchmark as key reasons for the strong financial showing.
Pemex revenues underwrite nearly one-third of Mexico’s federal budget and its investment budget is determined by Mexican authorities and legislators, while also accounting for 10 percent of Mexico’s export earnings.
For the last seven years however Mexico’s Pemex’s crude oil output has showed a steady decline, falling from about 3.4 million barrels a day in 2004 to just less than 2.6 million barrels a day currently.
The United States imports approximately one-half of Pemex’s output. U.S. Energy Administration statistics indicate, the United States total crude oil imports average about 9 billion barrels a day. The top four exporting countries are Canada (2.7 billion barrels per day), Mexico (1.3 bbpd) and Saudi Arabia (1.1 bbpd), with Venezuela in fourth place at 930 million barrels per day.
Worldwide demand for crude rose about 3.2 percent from a year earlier in the three months that ended June 30.
Pemex is trying to reverse its drop in oil output as the cost of the company’s benefit programs soar, leaving the company to face a possible $115 billion pension shortfall by 2019 as benefits owed to tens of thousands of retiring workers have greatly exceeded the funds set aside thus far to pay for retirement benefits.
Complicating the Pemex revenue picture is corruption. Transparency International recently rated Mexico 3.1 for corruption on a scale of 0-10, with 0 being very corrupt and 10 being very clean.