Organized Crime & Gangs

The Perilous Intersection of Mexico’s Drug War & Pemex

“The stillness of early Sunday morning December 19, 2010 was shattered by a thunderous explosion. Residents across San Martin Texmelucan, a small town about 60 miles from Mexico City, were awakened to the latest, and one of the most deadly incidents, involving possible fuel theft at Pemex, Mexico’s national oil company. Many were more than just jolted awake: Over 100 homes were damaged or completely destroyed; 30 people perished and more than 50 were injured. It was a national calamity for a nation and state oil firm that sorely did not need it.

Explosions, shootouts, deaths and violence have been increasingly seared into the collective minds of citizens in Mexico and the United States as the drug war persists. The battles between the government and competing cartels have been well-documented and the topic has coursed through the agenda of a series of high-level bilateral meetings between the two nations, most recently during Secretary of State Hillary Clinton’s trip to Mexico.

But what has also percolated just below the surface is an alarming intersection between the drug violence and Mexico’s energy sector. For Mexico and Pemex, the increased intensity of the drug war and its damage is but the latest in a string of challenges, and a twist that has seemingly linked two previously unconnected drags on the nation.

Indeed, oil—and energy more broadly—is not a sector of the economy where Mexico needs any further impediments. Pemex’s huge hurdles, which are derived largely from its inability to replace declining oil production and navigate a burdensome nationalistic legacy, are legendary. And the commensurate fiscal implications are enough to keep policy makers on both sides of the border awake at night.”

Source: The Perilous Intersection of Mexico’s Drug War & Pemex

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