Mexico our neighbors to the south

Roland Watson of the new area investor blog writes: due to the declines in one of Mexico's major oil fields the likelihood of a peso crisis has increased.   60% of Mexico's daily production comes from the offshore Cantarell field in the GOM. Decline rates in the past had been thwarted with nitrogen injection but Watson feels that this technique might have less effect in the future and the production rates will return to the historical downward trend.

With the Mexican economy deeply intertwined with the oil revenues PEMEX generates, weakness in its largest oil field could have some dire consequences.  Congress recently reduced the taxes the government received from PEMEX

The reduction in taxes could be seen as a sign that the Mexican government
is willing to sacrifice near-term rewards for possible long-term existence.

Mexico was the first major oil producer to boot out the private companies and
nationalize its natural resources.  While they have been quite successful
in the past, there are indications that the status quo will no longer
work.  Hopefully lower taxes will give PEMEX the capital resources to
explore and develop major fields.

PEMEX has been very active in the last couple years and actually employs the
greatest number of offshore rigs in the world.   However, this action
was supported by a great deal of debt.  The government had two
choices.  Allow private money in or lessen the burden of PEMEX.  They
have chosen the latter.   Still, will they have the
intellectual/technological capital to exploit the opportunities?