The development of the Mexican oil industry before 1970 falls very sharply into two periods. The first, beginning effectively in 1901, was the period of oil development by foreign international oil companies, mainly based in the U.S., though the British role was also significant. For a time, in the early 1920s, Mexico ranked second only to the United States as an oil producer, and was in fact responsible for about a quarter of all world oil production. From that point, however, production declined not only in relative terms but absolutely as well. This decline was due to a of exhaustion of the early reserves and the disruptions resulting from the long Mexican Revolution, which began in 1910 and left the country in a state of endemic instability until the early 1930s.
The period of foreign ownership and control of Mexico's oil resources ended abruptly on March 18, 1938, when President Lazaro Cardenas announced to his people the nationalization of most major foreign oil companies.1 This was a watershed date not only for the petroleum industry in Mexico, but for Mexican national life and the Mexican political system. In the eyes of the Mexican intelligentsia and populace, this could be called the culmination of the Mexican Revolution. Mexico had at last taken control of its natural wealth, and therefore of its national destiny. The date of the expropriation is thus still celebrated as a Mexican public holiday.
The international companies' nationalized holdings were consolidated as Petroleos Mexicanos (PEMEX). This national oil ________
Edward J. Williams, The Rebirth of the Mexican Petroleum Industry (Lexington, MA: Lexington Books, 1979), 6. company managed the country's resources and industry through the remainder of the period until 1970, which we are considering in this chapter, and continues to manage them today.
The history of the Mexican oil industry under PEMEX management between...