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Top 5 Exports: Mexico


Oil, cars, TVs, tractor parts, and computers top the list of Mexico's biggest exports

MINYANVILLE ORIGINAL Earlier this month, Minyanville ran an article from entitled Mexico: The China of the Americas, which highlighted the best ways to invest in Mexico's burgeoning manufacturing sector. Investing in iShares MSCI Mexico Investable Market Index (NYSEARCA:EWW) is just one way to profit from Latin America's second largest economy, as it benefits from increased investments, close proximity to the United States, and a favorable legal system.

Mexico's thriving GDP, which grew 4.6% last year, made it the world's 14th largest economy, owing much credit to exports.

Crude Oil

While Mexican crude oil reserves were ranked 16th largest in the world in 2011 (according to OPEC data) -- at an estimated 13.8 billion barrels -- Mexican crude oil production ranked eighth. The US Energy Information Administration totaled Mexican oil production at 2.96 million barrels day in 2011, which is actually a steep drop-off from 2004, when production hit its historical peak, at 3.83 million barrels per day.

The value of Mexican crude oil exports totaled $49.4 billion in 2011, which is significantly larger than the $35.9 billion worth of crude Mexico exported in 2010, when it ranked as the 10th largest oil exporter according to the United Nations Commodity Trade Statistics Database, A.K.A., UN Comtrade. (Note that 2011 export data hasn't been reported by every country yet.)

Of Mexico's 2011 crude oil exports, 81.6%, or $40.3 billion worth of crude oil, went to the United States.

Mexico's state-owned Petróleos Mexicanos, better known as Pemex, is a bastion of the Mexican economy, accounting for 40% of the government's revenue. Pemex has in recent years been hindered by the efforts of the newly formed National Hydrocarbon Commission, as reported by the New York Times. The commission has enforced strict safety regulations on and questioned the current practices of Pemex. In its 70 years of operation, the company has largely gone unchecked.

Earlier this month, CNBC covered the potential changes incoming Mexican President Enrique Pena Nieto could have on the Mexican economy, expressly, his commitment to push for increased private sector participation in the oil sector. In recent years, a number of non-Mexican companies have been granted permission to develop Mexican oil fields, including US-based McDermott International (NYSE:MDR) and Schlumberger Limited (NYSE:SLB), and UK-based Petrofac (LON:PFC).

Drillers currently bidding to develop Mexican-controlled oil fields in the Gulf of Mexico include Chevron (NYSE:CVX), Baker Hughes (NYSE:BHI), and Halliburton (NYSE:HAL).

Pemex may also join Brazilian semi-state-owned Petrobras (NYSE:PBR) as a publicly traded company at some point in the future if Nieto's reforms are fully realized.
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