Mexico's Nationalization of Foreign Oil Companies

... for the first time since the fall of Tinochtitlan, the Aztec capital, in 1521, Mexico was in the hands of its people (Grayson, 1980, p. xv).

The oil industry reacted swiftly and harshly. Oil companies withdrew their technical personnel from Mexico, crippling many of the operations of the industry. They attempted to establish an economic embargo against Mexico, seizing Mexican cargoes on the grounds that their oil holdings had been stolen (Grayson, 1980 p. 16). The Atlantic Monthly magazine, perhaps subsidized by oil companies, published a brutally racist special issue about Mexico's problems and shortcomings, real or imagined (Grayson, 1980 p. 17).

In the aftermath, the Mexican oil industry suffered severe operational problems. Workers in the oil industry found themselves in political and ideological conflict with other sections of the Mexican labor movement. Stripped of most of their technical experts, the facilities were mishandled. Yet, gradually, Mexican managers and specialists took effective hold over the operations of the industry. The expropriated company holdings

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1901 10,000 bbl 1908 3,900,000 bbl 1917 55,000,000 bbl 1921 193,400,000 bbl By the lastmentioned year, Mexico was producing about a quarter of the world's oil (Vernon, 1965 p. 77). Today, we associate oil most of all with automobiles, but during the earlier years of this period, the automobile was still a luxury item, of relatively little economic significance. A major early force encouraging oil production was the British Royal Navy. In 1912, under pressure from Winston Churchill, the Royal Navy shifted from coal to oil in its new classes of battleships (Grayson, 1980 p. 9). The advantages were tactical; oilfired engines could produce greater power from a smaller, more compact engine, so that oilfired ships were several knots faster than coalfired ships of the same size and overall design. Moreover, oil produced less highly visible smoke than coal, an important factor in detection of approaching enemy ships in the age before radar. The disadvantage was that while Britain had great quantities of coal, it had no oil. By the time of the Battle of Jutland (1916), Mexico provided seventyfive percent of the oil burned in new British bat
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Approximate Pages = 27 (250 words per page)

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