Wednesday, March 21, 2007

How To Beat The Levelin Supertux

Dismantle

"Dismantled PEMEX" Julio Pomar



- I want your views on how you see now the nation's energy industry, and if your situation somehow justify privatization ...

- This sector since 1982 is under a real attack by internal and external sectors. These are large oligopolistic firms or sectors external and internal partners that our energy sector undergoes a process of dismantling insistent. Very particular strategy has been handled, from the so-called international financial institutions like the World Bank and International Monetary Fund for such purposes.

For example, the division of PEMEX in four different companies, and made to compete with each other, including relationship difficulties, price, etc.. Is almost unheard of in the global oil industry. No industry or international oil company has operated successfully without an adequate and strong vertical integration of all activities, ranging from the well to petrochemical production various aspects chain. So that was very clear that the idea of \u200b\u200bdividing into four companies PEMEX, sponsored by the World Bank, a policy which was accepted very uncritically, very clumsily, by the de facto government of Salinas de Gortari, has generated an enormous vulnerability and a large inefficiencies, and that posts high, ranging from media management levels up, have more than quintupled without that was expressed in greater efficiency and higher production of the company. But the intention was not the company more efficient, as it was posed, but to prepare for decommissioning.

- They have become inefficient, contrary to what supporters say privatization ...

- Yes, absolutely. We have a number of indicators of how a company that sells supplies and PEMEX-production, not associated directly with Pemex-Petrochemicals and Refining, and then Pemex-Petrochemicals and Refining have to get out somewhere else, because they leave cheaper than buying them from another part of the company. This is crazy, absolutely no international company does that, the trend in all the major companies is precisaente accelerate, strengthen vertical integration, which is making them more efficient, but that's not what was on the minds of those who sponsored this division. The other measure

clumsy, a of the most serious action, occurred also in the mid 80's, and this was the chronic underfunding and systematic oil processing activity. In this regard we have the data from the same company, PEMEX we mean that it produced 20 million tons of petrochemicals and petroleum products, and currently only produces 6 million per year. That is, have done the opposite of what is done internationally and what any company, especially a public company in the Third World to do, which is the transformation, industrialization of a resource as fundamental as oil, with therefore added value, not an insert colonial cutting in the country specializing in exporting crude oil.

- How can this be seen in the context of the "divestiture" of state authorities?

We have another huge anomaly, which is not presented in any other major oil producer. We could say that Mexico is unique in the world, a country with these dimensions, no longer controls its steel, is unique in the world that no longer has a national banking system, and is a major global unique case producer and exporter of oil is more important, that spends more on imported refined products and petrol, natural gas, the value of exports oil. And that is defined as a major anomaly, is one of the most serious manifestations of the adoption of a colonial court scheme, which is a major regression, because from 1938, despite the sabotage of large enterprises that had concerned, and for the 60 and 70 this developed a real feat of petroleum engineering and technology development.

Well, and bad in the country, it has been almost reversed. Both in the field of petrochemicals and in the closely related with it, oil technology. The dismantling of the Mexican Petroleum Institute is really deplorable and what they have done is to transform the IMP generator technology center important to the national petrochemical plant, a kind of graduate schoolhouse. So I would say that would be another important element.

- Who implements these changes in government?

- Yes, this comes as part of the requirements of the country's creditors, articulated by the World Bank and implemented through the Ministry of Finance International Monetary Fund. I'm not saying this so to speak. I refer to statements made by Raul Munoz Leos, the first director of PEMEX during the administration of Fox, who has confessed to the Energy Department actually has nothing to do with the direction of the energy sector but that's what defines who manage budgets, which are the masters of Finance and precisely this secretariat has been the most subject to IMF guidelines. In such a way that's one of the main problems we have.

- What is what is proposed by the creditors of Mexico?

is the requirement for creditors is to open the entrance to the large monopoly or oligopoly its energy sector in the world. In a context in which the Mexican state agency has been subject to administrative dismemberment, which puts it in an extremely vulnerable in the face of big business, that contrary to what was done here, have strengthened their integration into both horizontal or vertical level.

- Petroleos Mexicanos has viablilidad and production and financial strength to succeed?

- Sure, there is another central point. Is that despite all this process very negative contrasts with what is done internationally, growing companies has undergone a veritable assault prosecutor. PEMEX has been paying between 87 and 106% of their profits to the treasury. If that compared with British Petroleum, which pays a rate of 30 percent, will note the degree of fiscal assault here. No company in the world endure harassment fiscal, fiscal sabotage of this size. And PEMEX is a company that has responded to the order of viability, which has endured, but of course, for example, to give one instance, for the year 2004 the company generated U.S. $ 42 billion net, but the Treasury tax imposed by 44 thousand, two thousand million dollars. In this way the company is forced to borrow to pay the IRS. That is, the Mexican government, under the hegemony of a predatory oligarchy and international interests, brutal assaults and irrational way to the company that makes the greatest contribution to funciionamiento government tax. PEMEX pays more taxes than all private meetings, and there's more: PEMEX revenues have allowed the government to have a lax attitude regarding what is a true tax reform that should be promoted, and that is that those with higher incomes pay more. Throughout the period of stabilizing development, which we can put práctricamente from the 60's and 70 to 80, the state always took care of business, besides being the largest taxpayer, to receive sufficient revenues by itself for maintenance and expansion.

- When is this policy?

- it's all gone with the so-called neoliberalism. It ended when the creditors imposed a regime at any cost, we call neoliberalism, but is specified in the conditions imposed by the WB and the IMF, for the serious blunder in the negotiation of the debt crisis made in the government of Miguel de la Madrid, the secretary of Haciernda, Silva Herzog Flores. This is not a product of globalization, in quotes, this is the result of a bad bargain, or a non-negotiation. U.S. negotiator of the Mexican debt, John Bailey, in times of Ronald Reagan, when here was in the power of the mother, was interviewed ten years later by Dolia Estevez, who asked what was the nature of the negotiations that will attention. Bayley said: "The thing that struck me was that the Mexican team, instead of negotiating for the position of a country debtor, was placed on the side of banks and creditors "and accepted the terms because it implied that only cash was a problem, not a crisis, not a major structural problem. And asked: "And if you were in the Mexican negotiating team, what would you do?". Replied: "I have met with major Latin American debtors and the banks would have faced had told them: if you do not change the parameters of the negotiations we go to a moratorium." Well, that was precisely what he was proposing the nationalist sector of Mexico and that was precisely what the great American negotiator was proposing.

- What was, therefore, the impact of these negotiations in the oil?

- have favored a debt service above all, put into question all the oil revenue and they began to accept these conditions and so enormous country brutally diverts public investment resources towards non-productive expenditures, as it was and the heavy debt service, generating huge budget gaps that were filled with loans. But these are not made by philanthropic institutions, but for-profit institutions like the World Bank, which articulates the interests of the business class of their countries. Then placed a number of constraints to open spaces for their businesses, and a fundamental part of the design was the dismantling or opening Mexican parastatal sector, which allowed large foreign monopolies into the country. And the more weight that sector, the petro-electric sector, which has resisted a lot but has been subjected to de facto privatization processes, which are more stressed from 82.

- And the electricity, how goes?

- two sectors - oil and electricity - are fully related by the fact that 80% of the electricity generated in plants driven by oil. So what we have now is the entry of these large consortia in the electricity sector. Iberdrola is already here and have a very large number of foreign companies in, for a number of changes to laws. The Salinas lawyer specialized in brutally attacking the country, was a usurper who needed legitimacy and legitimized on the basis of a very particular appeasement, which I discussed in my book for sale in Mexico, "with the attitude of another distinguished submissive as bad Santana.

- But in the oil sector have the multiple service contracts. With this scheme accelerated the dismantling of the company operating. For example, major general of PEMEX addresses begin to look like shells, but is retired and says goodbye technicians in layoffs ant workers to instead, signing contracts with international suppliers of certain services, such as with companies closely linked with the U.S. government, as Hallyburton, such as Bechtel, which are companies which, together with other contractors have taken over the country's main oilfield, the second largest in the world, which is that of Cantarell, and the management have done is based on immediate interests and security and business the U.S.. These interests are as a result accelerate the export of Mexican oil, for which the giant Cantarell field has been injected nitrogen into the reservoir, which according with international technical, is the worst that could be adopted, it serves to make the most in the shortest time, but it ruins the oil field. They have not paid attention to technical proposals as Garaicochea Francisco engineer who has made a very large number of studies on this, suggesting of course the re-injection of associated gas at Cantarell, which we would have saved between 4 thousand or 4 000 500 million dollars. I think we should pay much attention to what these engineers are telling us.

- This can be attributed to globalization?

- No, this is due to a submission, not globalization, but the referral an economic and political leadership of the country and the government leadership and the interests articulated by the White House Halliburton. Since Fox came to government in February 2001 to May 2005, had given contracts Hallyburton per thousand 222 million dollars. It is not anything, I am referring to only one company, which is linked to Mr Cheney. Besides the loss of business for the country, besides the desmantelmiasento and put aside the national oil industry, which cost much to develop as well as the technicians who took so trained, and workers much-needed employment, in addition to all that is the safety factor, because the eyes and ears gets companies intimamenmte articulated from the security apparatus of the EU, as Hallyburton, which handles information anywhere in the world is highly sensitive, as is the amount of oil are the oil fields.

Thus besides being a huge blunder - and I'm being very generous in terms, did not use the word treason, or corruption, although the terms to be used - the huge blunder of putting them foreign companies in the technical management of PEMEX, you already got us into the kitchen.

This implies that if I want to have data which is what is happening in our oil industry, I have to go to Houston to wonder foreign consultants because they have better data than we are. But do not forget that national security is data in a world where conventional oil is increasingly difficult to achieve, in which the oil discovery rate has virtually collapsed, in this world that we have a war the first and second oil reserves in the world. The first is in Saudi Arabia, the second largest producer is Iraq, and Iran continues, which is already in sight, in a world that is happening, which militarized international economic relations in our trading partner free comerdio preaches but does not believe in market mechanisms to gain access to oil from others, or believe in the invisible hand of the market, but in the hard fist of the Pentagon. The U.S. security elite does not have much confidence in market mechanisms, so much so use state instruments, and instruments may have been more powerful than the Pentagon or the CIA. In this world there is an enormous blunder committed this crime against the country that has been giving systematically with increasing depth, from 82 to date, although I fear that if I go and review the six years in which he acted Diaz Serrano (with López Portillo) encntraría serious problems for the close relationship this man with Zapata Drilling Co., which was a company run by George Bush Sr., who had served as CIA director.

- The picture, then, is disappointing for Mexico

- I would say that the picture we have is extremely dangerous for the future, as the systematic disinvestment in the maintenance, expansion in exploration and drilling for PEMEX and in compliance with the requirements of the Exchange Commission of the United States has made the reserve figures have collapsed, as well as exploitation.

That does not infer that the country has no oil resources. The country has with them, possibly in shallow water is a good deal, and also deep water and on the same platform enough, but this requires investment, drilling, and to incorporate billion barrels of proven reserve concept is needs precisely that investment has not been done. Consequently, in order to 2012-2014 are facing an extremely difficult, in a context of extreme vulnerability and the importance of oil to the functioning of the global economy and national.

As the electricity sector, this is highly oiling, so that the potential oil shortage can be devastating. In addition, the system of passenger and cargo of the country depends on oil percentage as high as the U.S., at 95-97 percent.

- Have we made progress in developing alternative energy sources?

- not seriously thought about what is going to be done over the next 10 to 20 years to arrive at a definition of the country's energy cocktail. Not because the country has no other renewable resources. Mexico is a solar country has enough solar capacity to generate a large amount of energy. It also has identified geographical areas and where possible, but has not yet been measured, but is substantial wind power, plus we have hydro and other options that are not environmentally harmful.

I certainly am not in favor of advancing the core-electricity because environmental costs can be catastrophic, as happened in the U.S., in Three Miles Island and Chernobyl, but there are renewable sources.

believe that if Mexico had continued with the industrialization of oil, with the expansion of the refinery plant as one of the cornerstones of accumulation, the standard of living in the country today would be similar to having the average Italian. That's what we have lost in these years of free market quotation marks, and neoliberalism.

- What is what awaits the national energy sector?

- The situation is not gray situation, but that dark at the moment. The country continues on this course. The current Lords ruling power are doing business. We just saw the shameful business of steel, the country and ran out of steel, that is, without the instruments of scientific and technological universities are being underfunded. The most unfortunate situation I see for the moment and we need not finish dismantling the oil company.

In sum, the World Bank's central idea, explicit in a book I did with Gian Delgado "Economic imperialism in Mexico", with documents and facts themselves are left to PEMEX as a shell, as a mere object of manipulation of public opinion, but all that is substantive business continue to dismantle.

And Calderon will follow the same line. I see there are gentlemen inside and outside who are very interested. Moreover, when we talk about national security, if not put the defense as a central point of petroleum wealth and their income, then you know that means national security.

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