# Affect of the recent presidential elections



## dongringo (Dec 13, 2010)

I've lived in Mexicio, on and off for 15 years since 1962. Things have not changed much, although the Mexican peso is now again more or less the equivalency of 8% of the US dollar which it was for most of its years.

Mexicans are still the foremost in badmouthing their own country and still need no help from outsiders. 

Aside from money, almost nothing ever affected my personal life style, and I doubt that it affected Mexican families, unless they hid their cash under mattresses.

Yes, a lot of stuff became more expensive, nevertheless, people kept smiling. 
The current murder rate, which is barely above the homicidal rage of Mexico before the 1970's, never bothered anyone. Roads were a *****, but are now mostly comfortable freeways. 

Laws made it easier for foreigners to own Mexican properties, and the price of visas quintupled or more.

If had to to see Mexico from a Mexican's viewpoint. Mexico is now better off than ever. That is probably why the recent election produced a new government. It is not better enough to satisfy its burgeoning class of wannabee consumers.

If you asked me, Mexico was better off during the 1970´s, 80´s, when most gave a sh.iit about civil liberties, monopolies, or freedom of the press and the government tried to do a China trick of pulling it's rathole country to a second world level. The in place government failed, after more or less selling off the country, and some FOX bought it. 

During all that time, I saw no changes that affected me personally, on a governmental basis, and I expect the new government to continue to be the same.


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## 146028 (Nov 16, 2011)

dongringo said:


> If had to to see Mexico from a Mexican's viewpoint. Mexico is now better off than ever.


Yes, things are so good out there that millions of Mexicans are having a party in the streets, celebrating Mexico's future. You should go join them!


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## conklinwh (Dec 19, 2009)

I guess that I'm sort of a broken record in that there are two things that could and would change lives here and I'm waiting to see what changes if any will occur.
-Will there be a change in how the government tries to deal with the cartels?
-If Pena Nieto gets a majority in the legislature, will he try to open up/take on the monopolies/duopolies that are really negatively impacting Mexico's ability to grow?

BTW, most of my friends here believe nothing will change with the cartels until the US addresses demand. In their view this means legalization/decriminalization. I sort of ask that what will all the foot soldiers do for money if drug money impacted.
As to the monopolies, Pena Nieto has said he will at least address Pemex given the rapid decline in crude and lack of refineries. A start if happened. Calderon tried but didn't have the legislature majority to pull off.


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## joaquinx (Jul 3, 2010)

conklinwh said:


> As to the monopolies, Pena Nieto has said he will at least address Pemex given the rapid decline in crude and lack of refineries. A start if happened. Calderon tried but didn't have the legislature majority to pull off.


PAN could never have opened up PEMEX as that would have been a very radical move against a Mexican institution. Whereas, PRI could. PEMEX union is part of the makeup of PRI. PRI is the protector of PEMEX as a wholly owned part of the Mexican patrimony. If PRI decides that it wants to open up PEMEX, this blessing will be supported by the union and the Mexican people.


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## conklinwh (Dec 19, 2009)

joaquinx said:


> PAN could never have opened up PEMEX as that would have been a very radical move against a Mexican institution. Whereas, PRI could. PEMEX union is part of the makeup of PRI. PRI is the protector of PEMEX as a wholly owned part of the Mexican patrimony. If PRI decides that it wants to open up PEMEX, this blessing will be supported by the union and the Mexican people.


I don't think anything will happen with retail or production but Mexico really needs help with exploration and that may be a start. Also, I was surprised that someone told me that Mexico does not have refining capability and really needs help to establish a refinery rather that export crude and import gas, etc. Think that you are right about PRI as they nationalized the oil industry and created Pemex as a monopoly. However even PRI understands decreasing revenue and doubt that they can increase gas fast enough to offset the drop in crude recovery.


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## joaquinx (Jul 3, 2010)

conklinwh said:


> I don't think anything will happen with retail or production but Mexico really needs help with exploration and that may be a start.


Exploration is where PEMEX needs the most help. Today, there is some foreign companies doing this, but as the risk and cost of exploration goes higher, these companies balk at doing more as the remuneration for their efforts remains at a lower level. I don't believe that we will see Shell stations on the streets and highways of Mexico as PEMEX wants to retain as much control over this resource as they can. I agree that PEMEX will retain control over production and distribution. With the savings from opening exploration to foreigners, investment in production and distribution will, hopefully, be increased.


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## conklinwh (Dec 19, 2009)

Agreed, agreed, agreed! I did think that NAFTA will require opening gas stations to competitors at some point unless specifically addressed in the treaty.


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## Tucson (Oct 30, 2010)

[_I]As to the monopolies, Pena Nieto has said he will at least address Pemex given the rapid decline in crude and lack of refineries. _

Lack of refineries: That would be a top proprity in my book. Mexico now exports their crude to Texas for refinery processing. Then they buy it back. This almost seems like a no-brainer that such a move would be in the best interests of Mexico, regardless of party affiliation.


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## dongringo (Dec 13, 2010)

Tucson said:


> [_I]As to the monopolies, Pena Nieto has said he will at least address Pemex given the rapid decline in crude and lack of refineries. _
> 
> Lack of refineries: That would be a top proprity in my book. Mexico now exports their crude to Texas for refinery processing. Then they buy it back. This almost seems like a no-brainer that such a move would be in the best interests of Mexico, regardless of party affiliation.


The Texas refinery, which only processes premium gasoline, is mostly owned by PEMEX


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## Isla Verde (Oct 19, 2011)

dongringo said:


> The Texas refinery, which only processes premium gasoline, is mostly owned by PEMEX


That's interesting. My question would be, why is it in Texas and not in Mexico, where it could create jobs for Mexicans?


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## Tucson (Oct 30, 2010)

PEMEX probably makes more money refining Mexican crude in Texas (and selling it to the highest international bidder) than they would in Mexico. After all, it is corporate profit that is the motivating influence here (as elsewhere). Maybe the PRI can "motivate" or offer incentives to PEMEX if they extend refining to a new location in Mexico, too. Sure would do wonders for the economic situation there. It still is a source of wonderment to the locals in Mexico as to why they don't have a refinery anywhere in their country, when they produce as much crude as they do.


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## Isla Verde (Oct 19, 2011)

Tucson said:


> PEMEX probably makes more money refining Mexican crude in Texas (and selling it to the highest international bidder) than they would in Mexico. After all, it is corporate profit that is the motivating influence here (as elsewhere). Maybe the PRI can "motivate" or offer incentives to PEMEX if they extend refining to a new location in Mexico, too. Sure would do wonders for the economic situation there. It still is a source of wonderment to the locals in Mexico as to why they don't have a refinery anywhere in their country, when they produce as much crude as they do.


Over the years I've read that a large portion of PEMEX profits gets siphoned off to the federal government with very little left to improve the PEMEX infrastructure, including construction of refineries within Mexico.


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## joaquinx (Jul 3, 2010)

Tucson said:


> It still is a source of wonderment to the locals in Mexico as to why they don't have a refinery anywhere in their country, when they produce as much crude as they do.


Mexico

Reynosa Refinery (Pemex) Reynosa, Tamaulipas
Minatitlan Refinery (Pemex) Minatitlan 167,000 bbl/d (26,600 m3/d)
Cadereyta Refinery (Pemex) Cadereyta Jiménez, Nuevo León 217,000 bbl/d (34,500 m3/d)
Tula Refinery (Pemex) Tula, Hidalgo 290,000 bbl/d (46,000 m3/d)
Salamanca Refinery (Pemex) Salamanca, Guanajuato 192,000 bbl/d (30,500 m3/d)
Ciudad Madero Refinery (Pemex) Ciudad Madero 152,000 bbl/d (24,200 m3/d)
Salina Cruz Refinery (Pemex) Salina Cruz 227,000 bbl/d (36,100 m3/d)

Source: List of oil refineries - Wikipedia, the free encyclopedia


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## tepetapan (Sep 30, 2010)

Isla Verde said:


> Over the years I've read that a large portion of PEMEX profits gets siphoned off to the federal government with very little left to improve the PEMEX infrastructure, including construction of refineries within Mexico.


 Pemex is part of and owned by the Federal Government of Mexico. To call it siphoning money is a lack of understanding. If you read the yearly Federal Budget of Mexico you will see Pemex supplies money to the Mexican people and has for decades. Last year the Federal Budget was set using proceeds from Pemex oil set at around $65 to $68 dollars a barrel. Mexican crude sells around $90+ dollars a barrel on average. Times hundreds of thousands of barrels a year..do the math.
Mexico is the 5th largest producer of oil in the world. They made the same amount of money from their oil last year as they did the year before and sold less barrels of oil. Why should they get all excited to produce more oil?


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## TundraGreen (Jul 15, 2010)

tepetapan said:


> Pemex is part of and owned by the Federal Government of Mexico. To call it siphoning money is a lack of understanding. If you read the yearly Federal Budget of Mexico you will see Pemex supplies money to the Mexican people and has for decades. Last year the Federal Budget was set using proceeds from Pemex oil set at around $65 to $68 dollars a barrel. Mexican crude sells around $90+ dollars a barrel on average. Times hundreds of thousands of barrels a year..do the math.
> Mexico is the 5th largest producer of oil in the world. They made the same amount of money from their oil last year as they did the year before and sold less barrels of oil. Why should they get all excited to produce more oil?


The production rate is currently several million barrels/day rather than hundreds of thousands/year. But here is why they should get excited about producing more oil (I couldn't quickly find a more recent plot):


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## Tucson (Oct 30, 2010)

Thanks for the correction and the very useful information which I will be sure to bring to our Mexican friends' attention when we go back to Q. Roo in October. So, there actually are 7 refineries in Mexico (who knew?) and some of the PEMEX money is actually helping Mexicans. My eyes have been opened! I guess our taxi drivers don't always have all the answers (and therefore I shouldnt believe everything they say) and we shall enlighten them upon our return. 

I don't suppose anyone knows how the PEMEX money is specifically helping their countrymen but assume such distribution or aid is linked to governmental programs, like healthcare services. 

For the best and most accurate information, I always check with you folks at ExPat Forum.


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## Longford (May 25, 2012)

:focus:

Some of my thoughts regarding the OP:



dongringo said:


> I've lived in Mexicio, on and off for 15 years since 1962. Things have not changed much, although the Mexican peso is now again more or less the equivalency of 8% of the US dollar which it was for most of its years.


The various devaluations over the years have had harsh effects on most Mexicans but of little negative impact to foreigners, particularly those of us spending US$, because of favorable currency exchange rates.



> Mexicans are still the foremost in badmouthing their own country and still need no help from outsiders.


Yes. There’s considerable discontent.



> Aside from money, almost nothing ever affected my personal life style, and I doubt that it affected Mexican families, unless they hid their cash under mattresses.


Yes, a lot of stuff became more expensive, nevertheless, people kept smiling.[/QUOTE] 

Inflation and the declining value of the currency has hit most Mexicans hard. For example, the number of persons living in poverty during the most recent two-year period has risen to above 50%. 10.5% of Mexicans are described as living in “extreme poverty” which means the urban poor survive on the approx. monthly peso equivalent of US$70 and the rural poor US$50.[/quote]



> The current murder rate, which is barely above the homicidal rage of Mexico before the 1970's, never bothered anyone. Roads were a *****, but are now mostly comfortable freeways.


The rate of crime and violence has increased and the spike upward is attributable almost entirely to the war. Making comparisons of statistics, especially crime statistics, is a challenge because there’s no central reliable database and crimes are not uniformly classified. Although there are some excellent toll roads in Mexico, most highways don’t fall into that category and many are not in the best of shape.



> Laws made it easier for foreigners to own Mexican properties, and the price of visas quintupled or more.


The process for expats purchasing property, particularly in the restricted zones, is still cumbersome. Regulations governing the issuance of visas will are in the process of being changed and some of the changes will be positive and others maybe not so. Time will tell. 



> If had to to see Mexico from a Mexican's viewpoint. Mexico is now better off than ever. That is probably why the recent election produced a new government. It is not better enough to satisfy its burgeoning class of wannabee consumers.


I doubt a majority of Mexicans will say the nation is now better off than ever. Certainly, Mexico has made impressive strides forward and a lot of that is the result of NAFTA and other treaties. Poverty is up, though. And there’s the inflation in the consumer products field. The new government is the result of the frustrations of people who are tired of 12+ years of war, terrorism, skyrocketing crime in some areas and a feeling that the nation is slipping back and not advancing forward. There was but once realistic choice in the election and I don’t doubt that there are many skeptical people who distrust the PRI based on it’s prior history. They’ve taken a leap of faith that today’s PRI is different from what they may have known 20 years ago.



> The in place government failed, after more or less selling off the country, and some FOX bought it.


Who sold what and who bought it? The comment doesn’t make sense to me.



> During all that time, I saw no changes that affected me personally, on a governmental basis, and I expect the new government to continue to be the same.


The “government” impacts the lives of everyone … in one way or another. Mexican or expat. It’s inescapable.


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## tepetapan (Sep 30, 2010)

TundraGreen said:


> The production rate is currently several million barrels/day rather than hundreds of thousands/year. But here is why they should get excited about producing more oil (I couldn't quickly find a more recent plot):


 I did look it up the other day but decided to go conservative in my numbers since I was too lazy to look them up again. The point is Mexico does not need more oil flowing, it is everyone else (USA?) who desires cheap gasoline. So who is getting excited and why? Mexico is no where near broke and in fact holds historically high amounts of cash reserves. 
What is in it for Mexico to increase production 20%? Lower crude oil prices and less profit. Mexico´s debit : GNP is around 38%, Canada is around 80% and the USA debit ratio is over 100%. Then take a look at Europe. what a train wreck that place is. And all these people giving budget lessons to Mexico.
Historically high cash reserves and low debt. Pump more oil, why?


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## Longford (May 25, 2012)

From what I've read several or more times, Mexico's oil reserves are declining rapidly and to preserve the flow of money from the sale of the oil and byproducts a huge sum of money is required to explore further and drill more. The nation has been unable or unwilling to allocate those exploration/drilling funds and that's why there has been, for a long time now, the suggestion that foreign companies be licensed/allowed to make those needed investments. The PRI had previously ruled-out further foreign investment/envolvement and the industry will be closely watching signs from the new President to see if he and the Congress will do something different.


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## tepetapan (Sep 30, 2010)

Longford said:


> From what I've read several or more times, Mexico's oil reserves are declining rapidly and to preserve the flow of money from the sale of the oil and byproducts a huge sum of money is required to explore further and drill more. The nation has been unable or unwilling to allocate those exploration/drilling funds and that's why there has been, for a long time now, the suggestion that foreign companies be licensed/allowed to make those needed investments. The PRI had previously ruled-out further foreign investment/envolvement and the industry will be closely watching signs from the new President to see if he and the Congress will do something different.


This is Old news
August 18. 2011
Pemex, Mexico’s state oil monopoly, on Thursday awarded the country’s first private oil-production contracts in more than 50 years to two companies as it attempts to rise open the country’s heavily protected energy sector to private capital.

Pemex issues private oil-production contracts - FT.com

This is only a few days old
EXICO CITY - Mexico's state-owned oil company Petroleos Mexicanos, or Pemex, said Tuesday that it had discovered as much as two billion cubic feet of natural gas reserves in the deep waters of the Gulf of M Production tests reached 34 million cubic feet a day of wet gas, and 110 barrels of liquids, Pemex said.

Pemex said that the Kunah-1 well at a water depth of 2,157 meters was the firm's most productive well in deep waters during exploratory tests. The well allowed Pemex to identify five wet gas deposits at different drilling levels......

RIGZONE - Pemex Finds Natural Gas Reserves in Deep-Water Gulf

So I guess this type of news takes awhile to reach Chicago. Or may be they just do not care to write about Mexico´s reserves.


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## Guest (Jul 5, 2012)

Not much of my personal commentary here, as Pemex is part of the government. Just a cut and paste of what others have said. It still seems to me though that the fastest way to get a bunch of Mexicans out into the streets protesting are to either raise the price of tortillas, or to speak of opening up Pemex to foreign companies' assistance. As they say, "Don't touch our oil!"

Pemex provides about 40% of the federal budget. (it used to be about 60%+ of the federal budget). That drop in Pemex revenues to the government, along with a Pemex US$50 billion debt burden, means less money available for social programs, more refining capacity or exploration.

Pemex's oil reserves:
1991: 50.9 billion barrels
2001: 18.8 billion barrels
2010: 11.7 billion barrels

Some history:
2003 NY Times story about Pemex:
Corruption and Waste Bleed Mexico's Oil Lifeline - New York Times
(interesting that the NYT says that in 2002 MX imported 25% of their gasoline. 10 years later, it's now at 50% imported)

Here's a 2008 story about the politics involved:
Change Proposed for Mexican Oil Monopoly in Crisis : NPR

Another from 2008 with a familiar face:
For Many, Control of State-Run Pemex Is About National Pride

Peña Nieto's plans:
Pemex Reform Harder as PRI Misses Majority in Congress - Bloomberg

And another current angle:
Borderland Beat: Mexico Becomes-Voluntarily- a Country of Masochists


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## Longford (May 25, 2012)

> "Pemex produced 2.538 million barrels of oil a day on average in June, according to preliminary figures on the company's website. At its peak in 2004, Pemex produced about 3.4 million barrels of oil per day."


Speculation and reports of potential new fields in which to pump oil from should be encouraging to Mexico, given the dramatic deline in production in recent years. But, let's wait and see if there's anything beyond a press release and if Mexico allocates the financial resources to bring the oil up. It's also good to read that Mexico believes it has discovered additional natural gas fields, and although the natural gas and oil issues are somewhat different it's good news, also, as long as the nation can put it to use.


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## tepetapan (Sep 30, 2010)

Longford said:


> Speculation and reports of potential new fields in which to pump oil from should be encouraging to Mexico, given the dramatic deline in production in recent years. But, let's wait and see if there's anything beyond a press release and if Mexico allocates the financial resources to bring the oil up. It's also good to read that Mexico believes it has discovered additional natural gas fields, and although the natural gas and oil issues are somewhat different it's good news, also, as long as the nation can put it to use.


I have been following along with the new find in the Gulf since it was first announced. It seems they have no intention of tapping these wells, along with many others that have been recorded. This latest find has been documented by many oil tech publications and since it was completed by hired vendors from outside of Mexico (deep water fields) is accepted by professionals. 
As stated, the market is glutted with natural gas and they plan on waiting until market prices make tapping these reserves worthwhile to Mexico. If you follow along with Mexico oil you know that they have numerous 3P reserves that are documented and confirmed. When crude gets back to the $130 to $150 a barrel range expect to see some movement, otherwise they are not looking to sell or invest. As I mentioned earlier, they do not need the money.


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## edgeee (Jun 21, 2012)

i love how "Affect of the recent presidential elections" turned into "Pemex...the real story", it just shows how any forum is like a bucking horse, it goes where it wants to.

but now i'm wondering, does Mexico have any government programs dealing with other energy resources, specifically solar and wind?
looks like either would be plentiful in Mexico.

how will the new regime affect this situation.


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## tepetapan (Sep 30, 2010)

edgeee said:


> i love how "Affect of the recent presidential elections" turned into "Pemex...the real story", it just shows how any forum is like a bucking horse, it goes where it wants to.
> 
> but now i'm wondering, does Mexico have any government programs dealing with other energy resources, specifically solar and wind?
> looks like either would be plentiful in Mexico.
> ...


Renewable energy sources accounted for around 27% of Mexico’s total installed power generation capacity in 2010, but this was mainly from large hydro plants. Wind energy development has only recently started, and in 2010, Mexico installed 316 MW of new wind power capacity, taking the total up to 519 MW, which represents a 156% increase over 2009.
This growth was spurred by a more supportive legal and regulatory framework, the availability of new transmission capacity in the Oaxaca region, significant wind turbine price reductions, and renewed access to financing, which had been extremely limited after the financial crisis.

Global Wind Energy Council - GWEC: Mexico

Latin America’s largest wind project to date is moving forward as Mexico’s Marena Renovables has placed an order for 396-MW worth of wind turbines with Danish manufacturer Vestas Wind Systems A/S. Vestas announced the order, which consists of 132 V90-3.0 MW wind turbines, this morning European time.
Source: Clean Technica (LatAm's Largest Wind Project to Power Mexico Coca-Cola, Heineken, OXXO - CleanTechnica

Huge wind farms on the Isthmus of Tehuantepec owned by business like Cemex, Coca Cola, Wal Mart and Oxxo. Plus there a a number of remote villages and ranches that use solar / wind for power. Electric is very expensive in Mexico, we just started switching to LED lights in the house, which run less than 25% of the published cost in Grainger catalog. 

One of the things I was told years ago by Mexicans. "We can always tell where the gringos live, it is the house with all the lights on"


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## edgeee (Jun 21, 2012)

off topic, but i'm wondering if i wasted money buying CFL bulbs for my house.
LEDs will make them obsolete long before they burn out.
at least my carbon footprint is smaller.


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## RPBHaas (Dec 21, 2011)

tepetapan said:


> Renewable energy sources accounted for around 27% of Mexico’s total installed power generation capacity in 2010, but this was mainly from large hydro plants. Wind energy development has only recently
> One of the things I was told years ago by Mexicans. "We can always tell where the gringos live, it is the house with all the lights on"


According to CFE, in 2008, 19% of electrical power was generated by hydro plants and 75% by thermo plants. There was/is only 1 nuclear reactor in Mexico located in Vera Cruz representing 2.4% of Mexico's electricity. I would imagine these numbers have changed slightly in the past 3 1/2 years.


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