Cotemar, Mexico’s leading oil services firm, was forced to lay off over 2,300 employees throughout 2016. This amounted to nearly a quarter of the company’s total workforce and led to considerable hardships, both for its employees and for Ciudad Del Carmen in the state of Campeche.
Campechanos, as the state’s residents are called, rely on the volatile Mexican crude oil business more than employees in any other state. Downturns in the crude oil business can hit families particularly hard. Often times, the main breadwinner of a household will be employed, in some capacity, in the petroleum sector. But even for households with two income earners, in a state where 80% of the workforce is employed in petroleum extraction, it’s likely that any downturn in the petroleum sector will lead to both income earners being laid off. Despite its close approximation to a first-world country, Mexico lacks the same quality of social safety net that’s found in other developed nations. This means families that lose their sole source of income are often left in dire circumstances, forced to borrow money from loved ones, send family members illegally to the United States or, in some cases, even consider working for Mexico’s powerful organized crime networks, which are always accepting applications.
But Campechanos have plenty of reason for optimism. In 2013, President Nieto signed into law sweeping reforms that will open Mexico’s petroleum sector to outside capital and firms, infusing much needed investment into developing and bringing online wells that will extract Mexico’s vast reserves of untapped hard oil. This oil, which Mexico itself has, thus far, lacked the capital or expertise to extract, is buried deep within shale deposits and in hard-to-reach, deep-water deposits located far from shore. Companies like Shell and Exxon Mobile have long track records of successfully extracting crude from such sites. With 90 billion barrels of untapped, potentially extractable oil, these companies’ entrance to the Mexican market has the potential to rocket Mexico back to the top of the list of global oil producing nations.
Cotemar and the residents of Ciudad del Carmen will be among the biggest winners from this bounteous new era for Mexico and its petroleum business.
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