Oil has been Mexico’s ticket to development for almost a century. And since the nationalization of Petróleos Mexicanos (Pemex) in 1937 — which Tuesday celebrated its 76 anniversary — it has been a source of pride and a fiercely defended symbol of Mexican independence.

However, the golden-egg hen that Mexican oil once was is dying out. Pemex, still the seventh-largest oil company in the world and source of 8 percent of Mexico’s GDP, has been fighting trouble for some time now. With a total debt of $61 billion, or $100 billion when labor liabilities are factored in, Pemex might be due for a serious makeover.

That was the decision of Mexican president Enrique Peña Nieto last year, when he announced an energy reform that would open the company to partnerships with foreign and private investors. The bill was approved by Congress, in spite of massive protests by irate Mexicans, and the company is expected to sign its first partnerships later this year.

One of the reasons for the energy reform was that Mexico’s oil reserves lie mostly offshore, where billions of barrels of oil are thought to be buried under the sea in the Gulf of Mexico. The country’s deepwater fields are promising, but Pemex is not currently equipped to exploit them. With its soaring debt and outdated machinery, the state-owned monopoly cannot single-handedly exploit the resources to their fullest. And that is where outside help comes in.

via Pemex Opening To Foreign Investment Will Pave The Way To Mexico’s Deepwater Oil Fields.