The week started for the Latam markets with an important announcement by Mexico’s President, Felipe Calderon. We are trying to keep politics (though not sports) aside of this blog as much as we can, but you’ll see this story matters for the equity markets in Latin America.
As part of a 3-people movement in its cabinet, President Calderon today replaced the General Director of Petroleos Mexicanos, more popularly known as Pemex. He named a University of Chicago-trained economist who goes by the name of Juan Jose Suarez Coppel to take over the reins from Jesus Reyes Heroles, a former energy minister and diplomat.
Pemex is the sole producer of crude oil, natural gas and refined products in Mexico. Now, some numbers to shed light on why the Mexican government is introducing big changes at the oil company. Integrated oil and gas companies are usually measured, in terms of operations, by some common stats. One of them is production, both  of crude oil and natural gas. Crude oil production for Pemex during fiscal year 2008 was 2.79 millions of barrels (bbls) per day. That’s 9.4 percent lower than the 3.08 millions of bbls produced per day during fiscal year 2007. Total oil and gas production (these two are measured in different units, oil being measured in barrels and gas in cubic feet; gas production is converted to barrels of oil equivalent to make them comparable) for 2008 annual was 3.96 millions of barrels of oil equivalent (BOE) per day, which is 9.8 percent lower than the 4.39 millions of BOE produced on a daily basis during ’07. Another important stat for an oil and gas company is the amount of reserves it has. Liquids and gas proved reserves (Charlotte Wright and Rebecca Gallun define these in page 623 of their “Fundamentals of Oil and Gas Accounting” as “the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under exisiting economic and operating conditions…”) totaled 14.31 billions of BOE at 12/31/2008, compared to 14.72 billions of BOE at the end of 2007. Pemex is an integrated oil and gas company, which means they are involved both in upstream activities (exploration and production of oil and natural gas) and downstream activities (the refining and distribution of petroleum products). Their refining stats don’t look good either. Production of petroleum products stood at 1490 thousands of barrels per day for 2008 annual, relative to 1511 for ’07.
Now, do Mexicans care about all these oil and gas stats? Nah, what they care about is that their national soccer team beat Costa Rica 3-0 Saturday night and is on track to qualify for the 2010 World Cup.  Giovanni dos Santos scored the first one, and gave the assists for the second and third ones. The best Latam soccer player? Messi? Nah… Giovanni!
Until the next update guys- Nick

Sources:
http://www.ri.pemex.com/index.cfm?action=home&language=2 (Fact Sheet on the right; all the oil and gas stats come from here)