Business: Mexican Gusher

Possibly the biggest yet

Will the leaders of the next oil superpower be wearing sombreros instead of desert kaffiyehs? Mexico became a net exporter of petroleum in 1975 as a result of discoveries of big deposits in the southern regions east of Veracruz, and since then, one leading U.S. energy analyst says enviously, "the Mexicans have been finding oil as fast as they put holes in the ground." Last week Jorge Diaz Serrano, head of Pemex, the government oil monopoly, announced the discovery of a new field that he says may contain up to 100 billion bbl.; that would be more than half as much as Saudi Arabia's proven reserves, as well as the biggest single accumulation of oil in the Western Hemisphere. Although Mexico's proven reserves are still formally pegged at a modest 20 billion bbl., officials have long said that the actual total is far higher.

The latest strikes were made near the Gulf Coast city of Tampico in the Chicontepec field, where Mexican oil was first found around the turn of the century. The newly discovered oil, which is located below tight, nonporous rock formations, will be difficult to bring to the surface, requiring 16,000 wells to be drilled over a period of perhaps 13 years. While the Mexicans do not belong to OPEC, they are able to exact a high price ($13.10 per bbl.) for the oil that they sell, most of which goes to the U.S.; naturally they plan to step up production sharply. In fact they now hope to triple their oil exports to 1 million bbl. a day by 1980. Though that is only about one-seventh of what the Saudis ship every day, it is impressive for a country that a few years ago was importing oil.