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Cafe & Bakery Since 1978 307 West 5th Street Austin, Texas discovered for more than a decade. So instead of investing in developing new resources, the conglomerate has been depleting existing oilfields at a record pace just to keep the Mexican government afloat. Even though 1997 oil reserves stood at 60 billion barrels and dropping, the lowest level since 1981, PEMEX extracted 3.2 million barrels a day last year, exporting 1.7 million of them, 79 percent to the United States. Such extraction rates will deplete Mexico’s oil reserves in forty years. Mexico’s biggest field \(twelve billion kilometers off-shore from Ciudad de Carmen, in the state of Campeche. It’s eighteen years old, and its arteries are so badly clogged that drillers have to inject nitrogen to bring oil to the surface. Farther out is PEMEX’s “ultimate frontier,” located 200 miles east of Tampico. But there’s more than a lack of money keeping PEMEX out of these new off-shore oil fields. The multibillion barrel deposits are projected to lie at 5,000to 7,000-foot depths, and PEMEX lacks the technical capacity to drill that deep. And the tracts are claimed, at least partially, by the United States. At the center of this U.S.-Mexico dispute are what petroleum geologists call “doughnuts,” in this case a pair of 6,000to 13,000-foot formations that have been compared to Persian Gulf deposits. The easternmost doughnut appears to lie within the 200-mile Exclusive Economic Zones , as defined by the Law of the Sea Treaty. Closer to Mexico, a doughnut estimated to contain upwards of twenty billion barrels is claimed by the United States and Mexico. Washington is so confident of its claim that for years, its Marine Mineral Management Bureau has been advertising tract 809 lease to the highest bidder. Because the Law of the Sea treaty requires neighboring countries to, settle offshore boundary disputes, Mexico and the United States have signed a 1978 agreement delineating their borders in the Gulf. But the treaty was never ratified by the U.S. Congress, because the oil-and-gas lobby claims the borders are unfavorable to industry interests. For fifteen years, the issue lay dormant, largely because the deposits were too deep to get to. But as the industry that had drilled all the shallower fields on the U.S. continental shelf followed subsidies promised by Bill Clinton into deeper water, new technologies have revived the debate. Shell Offshore, Texaco, Mobil, and Amoco formed a consortium to open up the Alaminos Canyon, 163 miles south of Corpus Christi, on one edge of the doughnut. And Samsung was contracted to build a super-platform ship for one Texas wildcat operation that already holds the 7,500-foot record for ultra-deep drilling. None of this goes over very well in Mexico, where President Lazaro Cardenas’ 1938 expropriation of Anglo-North American oilfields is still celebrated as a patriotic CONCHELLO IS NOT ONLY WORRIED ABOUT WASHINGTON. HE SUSPECTS THAT THE ZEDILLO GOVERNMENT IS TRYING TO SECRETLY DEAL AWAY “THE FOURTH LARGEST OIL-AND-GAS FIELD IN THE WORLD.” holiday. U.S. claims in the Gulf were recently challenged by Senator Jose Angel Conchello, head of the foreign affairs committee, and a senior member of the rightist not only worried about Washington. He suspects that the Zedillo government is trying to secretly deal away “the fourth largest oil-and-gas field in the world,” to Washington, and wants to know what went on at a November 14 meeting of Zedillo and Clinton. “They were alone for fifteen minutes after signing the protocol,” the Senator said of a private meeting following the long-delayed signing of the 1978 maritime treaty. “We don’t know what was discussed.” Negotiations on Gulf drilling rights resumed in late March in Washington, and will move on to Mexico City in June. Conchello claims that in the interim, the U.S. consortium could use horizontal drilling technology to tap Mexican deposits. “If Mexico doesn’t fight for its national territory now, the zone will be internationalized and the transnationals will move back in,” Conchello said. Foreign Minister Rosario Green is pushing for joint exploration of the doughnut, but she brings little more to the table than national pride. In the end, U.S. technology can get at the doughnut and PEMEX can’t. According to the International Energy Organization’s “Off-Shore Prospects to 2000” study, U.S. drillers could be pumping a million barrels a day out of deepwater Gulf of Mexico sites by the turn of the millennium. Don’t look for Washington to concede too much. For many, this assault on Mexico is as predictable as the sunrise or as Washington and Wall Street’s goal of privatizing PEMEX. Although the absolute sanctity of PEMEX was defended during the NAFTA negotiations, U.S. interests are now buying petrochemical plants and pipelines as Zedillo sells the conglomerate off one piece at a time. And in 1990, when then-president Carlos Salinas signed a contract with a lone Texas driller to perforate wells in the Gulf, the penetration of this sacrosanct industry by the hated gringos was loudly decried on the floor of the Mexican Congress. In 1998, on the sixtieth anniversary of Lazar Cardenas’ expropriation of the oil industry, thirtysix foreign drillers are operating in Mexico’s oilfields in the Gulf. John Ross is a regular contributor to the Observer. If John Ross’s The Annexation of Mexico: From the Aztecs to the IMF, is not at your local independent bookstore, have them contact Common Courage Press, P.O. Box 702, in Monroe, Maine. APRIL 24, 1998 THE TEXAS OBSERVER 23