A recent article titled ‘Mexico’s Woes: Quakes, Flu and Oil Production Collapse’ says Mexico’s oil production has been ‘collapsing relentlessly, and the the author can’t recall a single forecast by PEMEX that was not undercut later by worse than predicted production data.  The article reports that Mexican oil production fell 7.8 percent in Q1 2009 to 2.7 million barrels/day and that “The trajectory here is on pace to take Mexico’s output from 3.4 Mb/day as recently as early 2005, to 2.4 Mb/day perhaps as soon as this Fall”.   A question not addressed in the article is what these oil production declines will mean to Mexican Government revenues, and what alternate revenue sources might be available to the Mexican Government.  Clearly one place the Mexican Government could look for revenues are mining producers operating in Mexico – perhaps particularly those that are foreign owned.  While presumably the Mexican Government would have to walk a careful line so as not to dissuade mining companies operating in Mexico from reducing investment in exploration and mine development, that is not to say that it could not target such companies going forward for incremental income tax revenues.  I am not suggesting that it is by any means a certainty the Mexican Government will do this, but I think it is something investors in mining companies operating in Mexico ought to consider and possibly factor into their thinking going forward as they research, and do their research updates, on those companies.

Click here for Gold and Silver Mining Company Research.

See Blog Legal Disclaimer

Possibly Related Posts:

• U.S. January Jobs Report!
• More On Greece!
• Christine Lagarde – Listen Between the Lines!
• World Leaders – Greek Emotion?
• Roubini at Davos!

Trackback URI | Comments RSS