Mexico's Pemex faces drying field, no funds to update refineries

Sergio Solache
Republic Mexico City Bureau
Feb. 17, 2007 12:00 AM

MEXICO CITY - When an al-Qaida faction this week urged militants to attack U.S. oil suppliers in Mexico, Canada and Venezuela, it was a recognition of the powerful world role played by Petroleos Mexicanos, the Mexican oil monopoly.

Government-owned Pemex is the United States' second-largest supplier of petroleum after Canada and ranks No. 6 among the world's biggest oil exporters. The threat by al-Qaida in the Arabian Peninsula prompted the Mexican government to send troops to bolster security at pipelines and refineries on Friday.

In the long term, Pemex has other problems. The company's main Cantarell oil field in southern Mexico is drying up. There is not enough money to tap deeper reserves in the Gulf of Mexico, and much of the company's machinery is out of date. Pemex can't even refine enough gasoline to meet its national demand, forcing Mexico to send its oil to foreign refineries, then re-import the finished fuel.