By IPS Correspondents
MEXICO CITY, Mar 21 1997 (IPS)

Mexico celebrated the 59th anniversary of the nationalization of its oil industry this week in defiant mood at the economic pressure from the United States to clean up its fight against drug trafficking.

In a ceremony at a refinery in northern Mexico, President Ernesto Zedillo, with union leaders and other governmental authorities, expressed the opinion that nationalized oil represents a victory for national sovereignty. Speakers simultaneously denounced recent pressure from Washington demanding that Mexico increase it efforts to fight narco-traffickers.

There were also announcements of new investment and private participation in new exploration projects in the oil industry – which finances 40 percent of the national budget.

The state-owned Pemex company has a production target of hhree million barrels of crude oil per day for 1997 (200 thousand more than in 1996) and an annual income of 21 billion dollars.

Pemex, one of the few giant business concerns that has not been privatised, has proven oil reserves to last 40 years and historians and analysts view the company as the crystallizing agent for Mexico’s nationalist sentiment.

On Tuesday, Zedillo said that his country recognizes “no outside power that wishes to subordinate Mexican sovereignty” nor does it recognize decisions not grounded in Mexican authority.

Zedillo added that Mexico will not collaborate with any foreigners attempt to manipulate national dignity. He also said that all Mexican citizens recognize petroleum as a bulwark of national autonomy.

Both Zedillo and Caros Romero, the head of Mexico’s oil workers union alluded to the February 28th declaration by United States Congress that certification of Mexico’s anti-drug policy would be based on compliance with requirements laid down by Washington.

Romero said that (the United States) “will never achieve sufficient historic stature to be able to judge us, as if we Mexicans had no memory. They want to sit in judgement but we will not let ourselves be deceived.”

Pemex director, Adrian Lajous, underscored the importance of the state retaining control of its petroleum resources but he also pointed out that greater private sector participation is now necessary if Mexico’s hydrocarbon industry is to remain efficient and competitive.

Lajous said that the petroleum industry – which has private investment in the transportation, storage and distribution of natural gas – will soon welcome similar collaboration in the petrochemical industry which will result in Mexico tripling its industrial capacity in upcoming years.

In order to meet these challenges, Pemex has allocated 6 billion dollars for investment in 1997 – 35 percent more than last year, he said. It is also hoped that before year’s end investors will provide large sums of capital via a new law that enables the private sector to own up to 49 per cent of Mexico’s oil operations.

Jesus Reyes Heroles, Secretary of Energy, explained that the Mexico’s plan is to concentrate Pemex’ activities on exploration, production and processing of crude oil so that it might continue to enjoy 1996 profit margins.

Ronald George, vice-president of the Canadian Institute for Energy Research believes that Mexico’s new receptivity to foreign investment is inevitable over the long run since Mexico needs greater investment in order to maintain its current level of competitiveness.

Thanks to the increased value of crude oil on the open market which currently pays 18.90 dollars per barrel – 21 per cent more than was paid in 1995 – 1996 was, according to analysts, Pemex’ most profitable year in the last decade.

With daily foreign sales of 1.5 million barrels, Mexico is one of the world’s foremost petroleum suppliers. Nearly 80 per cent of Mexico’s oil production is sold to the United States; 8 per cent to Europe; 7 per cent to other Latin American countries and 5 per cent to Asia.

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