75 years ago, when President Cardenas announced his intentions regarding oil expropriation, a big nationalist wave overcame the Mexican population; earning him and his government strong support. On March 18, 1938, the oil expropriation was decreed; the government seized the resources from 17 foreign companies. With this, a process of capacitation and training of technicians began so that professionals in charge could take the production from foreigners’ hands into their own and more importantly, so that they could make it grow with only Mexican technology. The liberalization procedure and rescue of Mexico´s most valuable natural resource was beginning.
On June 7 of that same year, Pemex was created and in 1942 Pemex and the Oil Workers Union signed the first collective work contract. Both the Instituto Politécnico Nacional and the Instituto Mexicano del Petróleo where created to foster development of national technology.
Today Pemex is the oil company that pays the most taxes worldwide. The fiscal regime that binds Pemex to a remarkably higher tax rate than any other company in the industry is also making it administratively inefficient and be subject to financial losses as revealed by the Federation’s Supreme Audit.
Leaders from all political parties agree that a reform is crucial. “A profound reform is needed because Pemex pays in taxes 7 out of every 10 pesos it earns, but still is the main support of the Mexican economy,” says Jesús Zambrano Grijalva, President of Partido de la Revolución Democratica (PRD). However, PRD is making emphasis on being strongly against the privatization of the NOC. Partido Acción Nacional (PAN) is fully supporting the reform. The PAN senate members voted for the National Energy Strategy last February 28. This could be a good sign to forecast the PAN´s approval on the Energy Reform. The governing party, the Partido Revolucionario Institucional (PRI) is clearly supportive of the Energy Reform. Peña Nieto and other party leaders have been repeating that the reform will not privatize Pemex, but will allow it to associate and partner with foreign investors in joint ventures only in certain areas, following the model of Brazil’s Petrobras.
Today, proven oil reserves go up to 13 thousand 868 millions of oil barrels, which guarantees production for 10 years and 3P proven reserves will allow production for 30 years; adding up to 44 thousand 530 million crude oil barrels.
“The objective of the Energy Reform is to make Pemex bigger and more productive,” Emilio Lozoya Austin, Director of Pemex, stated in the Commemoration of the 75 years of the Oil Expropriation. “It is the way to help Pemex develop the deep water technology that it currently does not have, and to have partners to diversify the risks from very expensive projects that need millions of dollars’ worth of investment, with the private sector.
Peña Nieto indicated that Mexico needs to accomplish three strategic principles: Energy Efficiency, Energy Security and Energy Sustainability. And in order to reach an oil industry forefront, it is necessary to transform Pemex with these six lines of actions:
First, establish a new organizational structure. Second, encourage corporate ethics and social responsibility. Third, promote green growth. Fourth, empower local industry. Fifth, orient investment towards higher value-added activities and return it to the country. Sixth, strengthen their capacity for investment and technological development.
So for the celebration of 75 years of the expropriation, we have but a big horizon and big plans for Pemex, proving that Mexico can not only grow bigger by using the natural resources it possesses, it can grow stronger by using its technology, it´s power and it´s human capital.

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