World oil prices are breaking records. The Middle East is racked with problems. Latin America’s energy companies should be booming.

Yet Pemex, Mexico’s state-owned oil company, recently posted net losses of nearly $1.5 billion. The company’s inability to turn a profit has sparked a nationwide debate over Pemex’s future. President Felipe Calderon is proposing that the state oil monopoly open itself to foreign investment.

According to a report released by Mexico’s federal energy department at the end of March, Pemex has drilled roughly one well a year in the Gulf of Mexico since 2003. In contrast, private firms on the US side of the Gulf have drilled 167 wells annually. “Pemex needs to work with other companies to develop diverse activities … and to obtain better equipment and maximise the country’s oil income,” the report concludes.

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