| | |  Business News 
Deals Lag, as Does Mexico's Oil Output
 Catherine E. Shoichet - Associated Press
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March 01, 2010
Mexico City Mexico's oil production continues to fall from year-ago levels as the government struggles to implement hard-fought energy reforms designed to boost exploration.
January crude production was 2.615 million barrels a day, a 2.6 percent decline from 2.685 million in the same month of 2009, state-run oil company Pemex reported last week.
The bright side is that January output was the highest level in nine months, though still a significant drop-off from the record annual average of 3.4 million barrels a day in 2004.
The majority of oil reserves in Mexico's waters remain untapped because Pemex lacks technology for exploration.
After a hard-fought battle waged by President Felipe Calderon, Congress passed a bill in 2008 intended to give Pemex more flexibility to make exploration deals with foreign companies. Although significantly watered down to win opposition support, the bill was a landmark in a country where state ownership of oil is a matter of national pride.
More than a year later, however, Pemex has not sealed any new exploration deals with foreign contractors amid red tape and political resistance.
They have been so delayed because they are very complex, very difficult, Pemex board member Fluvio Ruiz said. It's a very sensitive topic for this country.
Ruiz said it will likely take until year-end to make any new deals final. He said Pemex has been implementing complicated changes mandated by the reform bill, including overhauling Pemex's corporate board to include outside experts.
Meanwhile, international oil companies are cashing in on major discoveries on the U.S. side of the Gulf of Mexico.
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