MEXICO CITY - OPEC's call for Mexico to help shore up oil prices is likely to fall on deaf ears among policymakers already fretting about sliding oil output and as a massive hedge shields 2009 government revenues.
OPEC ministers urged Mexico and other large oil exporters such as Norway and Russia to join in deep production cuts as the cartel struggles to stem a $100 collapse in oil prices since July.
But while Russia has offered cuts and Norway was quick to reject the request, Mexico has remained silent.
"I don't think Mexico will do anything. Their output is already declining naturally so I can't see them cutting more," said Eurasia Group analyst Enrique Bravo.
Mexico has traditionally maintained its independence from OPEC although in the past it has cooperated with the group to bolster oil prices. The country joined with OPEC in 1999 and 2000, promising cuts in oil exports after oil prices crashed to less than $10 a barrel.
But since then, Mexican oil production has tumbled to a 13-year low due to sliding output at the giant Cantarell oil field. While the government has vowed to hold output steady at 2.75 million bpd in 2009, analysts are skeptical that state oil company Pemex has got to grips with its output problems.
The Mexican government has not answered repeated requests for comment since OPEC began asking for assistance in November. But officials not authorized to speak about foreign policy have indicated Mexico is unlikely to do anything given its output problems.
"We are doing everything we can to boost our production, why would we cut?," remarked a senior Mexican energy ministry official who declined to be identified.
Mexico, seeking to bring in more private sector expertise to revitalize the energy sector, recently overhauled its energy laws, among the most restrictive in the world,
But a legacy of underexploration has left state oil company Pemex with few options to replace output from Cantarell.
Medium-term efforts focus on spending billions of dollars to tap the challenging Chicontepec area, where Pemex already has drilled hundreds of wells but so far has failed to transform the area into a major production asset.
Hoped-for finds in the deep waters of the Gulf of Mexico are unlikely to begin production until the next decade due to a lack of offshore infrastructure, analysts said.
BIG HEDGE
Further reducing the urgency for Mexico to help boost oil prices was the shrewd move by the finance ministry to hedge the country's entire net oil exports for 2009.
The government announced in November that it had spent $1.5 billion to lock in a $70 oil price for all 330 million barrels of oil it expects to export in 2009, the same price used to estimate the federal budget.
"There's no threat to the budget," said Alonso Cervera of Credit Suisse in New York.
"Oil output is falling. I don't think the government has any incentive to cut, hedge or no hedge."
OPEC ministers urged Mexico and other large oil exporters such as Norway and Russia to join in deep production cuts as the cartel struggles to stem a $100 collapse in oil prices since July.
But while Russia has offered cuts and Norway was quick to reject the request, Mexico has remained silent.
"I don't think Mexico will do anything. Their output is already declining naturally so I can't see them cutting more," said Eurasia Group analyst Enrique Bravo.
Mexico has traditionally maintained its independence from OPEC although in the past it has cooperated with the group to bolster oil prices. The country joined with OPEC in 1999 and 2000, promising cuts in oil exports after oil prices crashed to less than $10 a barrel.
But since then, Mexican oil production has tumbled to a 13-year low due to sliding output at the giant Cantarell oil field. While the government has vowed to hold output steady at 2.75 million bpd in 2009, analysts are skeptical that state oil company Pemex has got to grips with its output problems.
The Mexican government has not answered repeated requests for comment since OPEC began asking for assistance in November. But officials not authorized to speak about foreign policy have indicated Mexico is unlikely to do anything given its output problems.
"We are doing everything we can to boost our production, why would we cut?," remarked a senior Mexican energy ministry official who declined to be identified.
Mexico, seeking to bring in more private sector expertise to revitalize the energy sector, recently overhauled its energy laws, among the most restrictive in the world,
But a legacy of underexploration has left state oil company Pemex with few options to replace output from Cantarell.
Medium-term efforts focus on spending billions of dollars to tap the challenging Chicontepec area, where Pemex already has drilled hundreds of wells but so far has failed to transform the area into a major production asset.
Hoped-for finds in the deep waters of the Gulf of Mexico are unlikely to begin production until the next decade due to a lack of offshore infrastructure, analysts said.
BIG HEDGE
Further reducing the urgency for Mexico to help boost oil prices was the shrewd move by the finance ministry to hedge the country's entire net oil exports for 2009.
The government announced in November that it had spent $1.5 billion to lock in a $70 oil price for all 330 million barrels of oil it expects to export in 2009, the same price used to estimate the federal budget.
"There's no threat to the budget," said Alonso Cervera of Credit Suisse in New York.
"Oil output is falling. I don't think the government has any incentive to cut, hedge or no hedge."
