ABSTRACT
The hydrocarbon subsector clearly manifested the limitations of the low-price and subsidy policy; the delay in key activities, such as exploration; and the priority given to short-term investment as opposed to basic slow-return investments. Petroleos Mexicanos (PEMEX) felt that Mexico's economic development should be based on a hydrocarbon production and exporting capacity strong enough to guarantee adequate operation of the productive apparatus and to obtain the necessary foreign exchange to eliminate bottlenecks. The petroleum industry has for many years been one of the most important factors in Mexico's development. Over a period of thirty years after expropriation decree in March 1938, the oil industry gradually became an essential part of the country's program for internal development, with oil production becoming a major factor in the industrialization process. In mid-1981 PEMEX's dynamic financial situation began to slow because of fluctuations in international oil prices.
