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

by Daniel Yergin

Whereas Mexico had been a country to be avoided by international lenders through 1976, it now became one of the most active borrowers in the world. “Why the Bankers Suddenly Love Mexico” was the title of an article in Fortune. The reason, of course, was oil. “Every Tom, Dick, and Harry in banking is knocking on their door,” said the vice-chairman of Manufacturers Hanover Trust. One Mexican official was even chosen “borrower of the year” in 1978 by a New York financial newsletter. The title might well have been won by the whole country. There seemed to be no restraint: The Mexican government was borrowing from abroad, Pemex was borrowing, other state companies were borrowing, private firms were borrowing, everyone was borrowing from abroad. How much was being borrowed altogether? No one knew. But it didn’t seem to matter. Mexico’s credit, lodged in oil, was good. Or so the bankers and their Mexican counterparts thought. But one thing was certain: Mexico had become a major new force in the world oil market, as it had not been since the 1920s, and it would provide yet another significant alternative source of supply, undermining the OPEC Imperium.6