Brad Will and the politics of oil - Page 3

Fallout from murdered journalist reveals move to privatize PEMEX

To exacerbate this doomsday scenario, Mexico is pumping out what it has left at a record clip to capitalize on the booming barrel price - PEMEX now produces about 3.2 million barrels daily, fully 1.7 million of which are sent up the Gulf to the U.S., an export platform that is accelerating depletion and subsidizing Washington's wars around the world.

Given this bleak picture, most experts concur that the only place PEMEX can go to drill for new reserves is deep water, five miles down in the Gulf of Mexico. The only catch is that Petrolios Mexicanos does not have deep water drilling capacity. That's where Petrobras, as contemplated in the PRI/PAN privatization scheme, would come in handy.

What exactly constitutes privatization? Auctioning off the corporation from the top

to the highest bidder or selling it off piece by piece from the bottom? During 35 years of oil boom and bust, PEMEX has systematically dismantled its Exploration & Exploitation division and handed it over to transnational subcontractors, emphasizes Autonomous National University researcher John Saxe- Fernandez who heads up the UNAM's Strategic Resources Institute. At the top of Saxe-Fernandez's list of prominent subcontractors is Halliburton with 159 PEMEX contacts since 2000 worth $1.2 billion USD - Halliburton moved into Mexico in the 1990s during the development of Cantarell when Dick Cheney was CEO.

But subcontracting out choice contracts goes back generations. George Bush pere partnered with PEMEX director Jorge Serrano (who later went to jail) in Zapata Offshore, a drilling outfit that operated in the Sound of Campeche in the 1970s. Today, virtually every major transnational driller has a piece of the Mexican action.

A recent daily La Jornada investigation by energy reporter Israel Rodriguez revealed the signing of a series of secret "pre-privatization" covenants to exploit Mexican fields with Shell (the mysterious "Project Margarita"), Exxon, Petrobras, Nexen (Canada), and StatsOil (Norway.) The contracts, accessed through Mexico's Freedom of Information Act, contained clauses whose contents cannot be divulged for the next five years.

The PRI/PAN energy scam is currently being hatched in the Mexican Senate's Energy Commission chaired by Francisco Labastida, a former secretary of energy (as is Calderon) and the PRI's losing presidential candidate in 2000. Those who have gotten a peek at the details label the energy reform legislation "privatization lite" with foot-in-the-door measures that will allow for the "association of private capital" in such areas as pipelines and refineries. The legislation stops short of amending the Mexican Constitution's Article 27, which stipulates that the petroleum belongs to the nation.

Skirting a constitutional amendment will deny ammo to AMLO - leftist Andres Manuel Lopez Obrador, who many believe was swindled out of the presidency in 2006 and who has emerged as the leader of the fight against privatization. This January, Lopez Obrador announced formation of a cross-party Movement In Defense of Petroleum whose battle cry is "Mexico is not for sale!"

The ex-presidential candidate proposes that PEMEX can raise sufficient revenues without opening itself up to private investment by simply cleaning house - the corporation has long been riddled with corruption, bribe-taking, kickbacks and rampant dirty dealing. For decades, the PRI siphoned off millions to finance its electoral campaigns - in 2000, $110 million USD in PEMEX funds were funneled through the gangster-ridden petroleum workers union into Labastida's campaign coffers, the so-called "PEMEXgate" scandal.

AMLO has also long advocated the construction of three new refineries to offset the escautf8g cost of importing gasoline which he tags "an absurd situation" for the world's sixth largest oil producer.