Mexico's state oil firm in trouble

March 9, 2007 at 7:09 PM

MEXICO CITY, March 9 (UPI) -- Mexico's state-owned oil company Pemex is in dire financial straits and lacks the means to reverse its slide, The New York Time reported Friday.

Though Mexico is the second-largest supplier of oil to the United States -- behind Canada -- Pemex could have trouble meeting domestic and foreign demand in the coming year.

Experts agree the problem with Pemex is political in nature. The company funds some 40 percent of the national budget in Mexico and was also hurt in recent years by short-sighted management.

"Inside Pemex, I think they have creative solutions," Amy Myers Jaffe, an energy analyst at the James A. Baker III Institute at Rice University, told The Times. "They know what they want to do. How do you get that solved within the politics of Mexico?"

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