Mexican Bonanza
Green, soggy and buzzing with flies, the state of Tabasco at the southeastern tip of Mexico has had some modest local fame as an oil region for decades. Now it has suddenly become the center of the most exciting mystery story in world petroleum. By drilling deeper than ever before--as far as three miles into the geological subbasement--Mexican engineers have found a much bigger reservoir of oil than anyone had suspected was there, a subterranean lake of petroleum three or four miles wide and perhaps up to 30 miles long.
Though the first of the new deep wells came in more than two years ago, no one outside Mexico paid much attention until last month, when an ARCO executive mentioned the find to Presidential Assistant L. William Seidman. Ever since, oilmen have been trying to estimate the size of the discovery, with no help from Mexican officials, who insist that they just do not know. Some skeptics place the reserves as low as 1 billion bbl., which would have significance only to Mexico. But other estimates, including the one now accepted in Washington, cluster around 15 billion bbl. If that figure proves to be correct, it would rank Mexico in about the same class as Nigeria among the heavyweights of world oil.
Whatever the size, the Tabascan strike is probably Mexico's biggest ever;* it already has turned Mexico from an oil importer to an exporter of 60,000 bbl. a day. The impact, reports TIME Correspondent Bernard Diederich, has already been felt in the Tabascan capital of Villahermosa, where land prices have soared as much as 2,000% and hotel space is at a premium. Tabascan Governor Mario Trujillo Garcia predicts that Villahermosa's population, now 150,000, will double in eight years. Out in the countryside, where rainfall of up to 400 inches a year keeps 40% of the land under water, the rapid change is not appreciated. The oil belongs to Pemex, the state oil monopoly; farmers receive money only for their land and no petroleum royalties. "They are worried that our drilling will ruin their fishing," says a Pemex engineer aboard the Chac, a marine drilling platform named for the Mayan rain god, as two fishermen glide by in a dugout canoe.
New Weight. Other Mexicans are enjoying the new weight that oil gives them in world councils. Within two years, Mexican officials think that the country could be exporting 200,000 bbl. a day, enough to put it in the same league with member producers of the Organization of the Petroleum Exporting Countries. Indeed, Mexican officials are expected to begin sitting in on OPEC meetings soon as observers. Mexican President Luis Echeverria Alvarez told President Ford last month that Mexico would export its oil at world prices, diluting hopes that it might undercut those vastly inflated quotes. These just might begin coming down soon anyway. A Saudi Arabian official last week reportedly told delegates to the Arab summit at Rabat that his nation would shortly make a unilateral price cut of less than 10%; officially, the Saudis denied the report. In any case, the U.S. is pleased to welcome Mexico to the ranks of oil exporters. Though Mexico will sell some of its exported oil to other Latin American countries, most will go to the U.S., which will be happy to buy it. It would be a relatively safe and geographically close substitute for some of the Arab oil imports that could be cut off at any time.
* And of more immediate world importance than a strike reported last week in the Norwegian North Sea just below the Arctic. Oil exists there in quantity but under 4,800 feet of water; the technology does not now exist to get it out at acceptable cost.
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