The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

It was becoming clear that Mexico possessed world-class oil reserves. In 1974, the country started, in a very small way, to sell petroleum abroad again, though the export of oil was criticized by some as running against the tenets of Mexican nationalism. While production was rising, the engineers in Pemex continued to be very cautious in their estimates of reserves through the last years of the Presidency of the radical, nationalistic Luis Echeverría Álvarez. But matters changed with the election of a new President, José López Portillo, in 1976. López Portillo, who had been Echeverría’s Minister of Finance, inherited an economic crisis that was Mexico’s worst since the Great Depression. The Mexican economic miracle had run out of gas, the economy had stalled, the value of the peso had collapsed, and the country was regarded as a poor risk by international lenders. To make matters worse, the population was growing faster than the economy—one out of every two Mexicans was under the age of fifteen—and 40 percent of the workforce was either unemployed or underemployed. In the months before López Portillo actually took over, conditions were so bad that there were even rumors of a possible military coup.