A JAR of crude oil, not much bigger than one of baby food, has pride of place in the office of Carlos Morales, the veteran oilman in charge of exploration and production at Pemex, Mexico’s state oil monolith. He handles it reverentially because it comes from Maximino, a deep-water field in the Gulf of Mexico, close to his country’s maritime border with the United States. Deep water is a territory that Pemex has only just started to explore.Although privately owned oil majors such as Chevron have been drilling successfully in non-Mexican waters near Maximino for several years, Pemex has been left behind. After 23 failed attempts and billions of dollars of investment, it finally struck deep-water oil last year. But the amounts recovered so far are negligible. Mr Morales laughs weakly when asked if the jar on his desk is all there is.The discoveries—none of which yet count as proven reserves—are emblematic of both Pemex’s problems and its potential if it were freed from one of the most restrictive oil regimes in the world, and able to partner with private firms with expertise it lacks. Its forte has been drilling oil in shallower waters of the Gulf of Mexico. But in the past decade production in its most bounteous shallow-water field, Cantarell, has plummeted from over 2m barrels a day to less than 400,000, and it has struggled to find new reserves to compensate.Oil and gas…
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