Prospects for a Stronger United States-Mexico Energy Relationship

Mexico currently has sufficient proven and probable reserves of oil and gas to sustain a production level high enough to make it a major world producer of these fuels within a decade. Moreover, the size of its reserves, 50 billion barrels of oil equivalents, and its potential, ultimately recoverable reserves of 200 billion barrels of oil equivalents, have important implications for a strong future relationship with the United States and the rest of the world. Presently, plans call for Mexico to produce between 2.5 and 2.7 million barrels of oil a day in 1980. About half will be available for export with 60 percent or more expected to be sold to the United States. Although the United States has been receiving increasing volumes of Mexican oil exports, actual energy cooperation between the two countries has not been extensive in the past beyond the establishment of a mixed U.S.-Mexico commission to discuss scientific and technical cooperation, the formation of an energy working group, and a geothermal agreement.