As Cantarell Collapse Continues, Calderon Mulls Big Changes In Tax, Oil Laws - Bloomberg

[hatrack]

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Mexico has Latin America's second-lowest tax collection rate, after Guatemala. It must boost revenue from sources other than oil and partner with other companies to drill more crude, Calderon says, because Cantarell, the main oil field of state monopoly Petroleos Mexicanos, is producing less and less petroleum.

The field, which accounts for half of the country's oil production, yielded 12 percent less oil in 2006 than in 2005, and production will fall another 15 percent this year, according to Pemex estimates.

Calderon, a former energy minister under Fox, says crude oil from the Gulf of Mexico buried in waters as deep as 1,500 meters (4,900 feet) represents the future of the oil industry. Pemex doesn't have the technology to drill so deep, and Calderon is seeking the help of companies such as Brazil's Petroleo Brasileiro SA to acquire it.

Mexico's constitution and laws say the government owns all oil resources. According to Calderon's development plan, issued on May 31, he'll offer legislation allowing private companies to profit from certain oil activities that weren't specified. Phillip Blackwood, who manages $2.2 billion of emerging- market debt at Jyske Invest in Silkeborg, Denmark, says Calderon has a real chance to get additional legislation passed. ``Calderon is actually going out and seeking and creating cross- party agreement,'' Blackwood says. ``If he plays his cards right and treads carefully, there certainly is a basis for moving some of the reforms forward.''

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http://www.bloomberg.com/apps/news?pid=20601103&sid=aWGLJqAOJgoc&refer=us

[Javaman]

1. Prediction: shit hits fan in Mexico in less than 3 years...

the oil production started going down, so the gov't tried to do the ethanol thing, but the people got pissed because the price of corn skyrocketed thus costing more to make Tortillas, the basic food stuff in Mexico. Okay, then the gov't said, lets open the oil fields to outside investment, this caused the people to go ape shit. because nationalized oil is written into the Mexican Constitution. Okay, with no other recourse, they raise taxes.

I knew this last part was coming, but it will get worse.

as Canterall continues it's decline at a 15% rate yearly, they have to cough up more and more money to run the gov't, because the revenues from the oil sales accounts for 40% of the economy!! Whooops!

It's not going to be pretty folks, if Canterall outright collapses, we, us, the world is fucked.

Why? if they people got bent out of shape because the price of corn was to high and the possible outsourcing of their oil industry was just talked about, can you imagine what is going to happen when the gov't has a 40%+ short fall? 3 bucks a gallon will be a fond memory.

Illegals are the least of our worries, refugees we be streaming across the border soon. Followed by a nice little border "incident".

Let's see if those asshole minute men are there "defending" the U.S. then. It's all macho to play border asshole but it's a very different story when the bullets begin flying.

Not going to be pretty.

[phantom power]

2. "50 percent within the next five years"

Wouldn't that be... something.

Brown's math suggests that world oil exports will drop by 50 percent within the next five years, certainly enough to trigger a systemic breakdown in market allocation, meaning serious supply shortages among the importing nations. That's us. We import two-thirds of all the oil we use.

http://jameshowardkunstler.typepad.com/clusterfuck_nation/2007/06/peak-suburbia.html