Transcription
Your camera too. Thank you. Good afternoon. It is a pleasure, and the intention is to discuss the country, the investment, what happened many years ago, what happened fewer years ago, and what is happening. I will start very quickly with a brief outline, a reminder, because I believe I have mentioned some of this to you before. During the Great Economic Depression in the United States in the 1930s, it had consequences worldwide, and those consequences in Mexico were very significant. You will recall that the American economy, apart from the stock market crash in October 1929, was followed by a period of crisis. Thus, the fall in markets and values substantially reduced worth, and the economy collapsed. The economy was very bad throughout the 30s, 30, 31, 32, 33, 34. In '34, Roosevelt tried to improve the situation through some somewhat forced investment activities. That also didn't work. The economy of the United States, and of course the world, was in very, very bad condition until '38, '39. Then came World War II, and obviously in World War II, which was a very intense war, factories had to work. Factories made armaments and a thousand other things. And during that time, Mexico was also very active in production in the factories.
Well, what happened was that around 1932, a general who was also a leader in Congress, named General Rafael Melgar, proposed and established and insisted on promoting a nationalist campaign. It was called the Nationalist Campaign. This was around 1932, the Nationalist Campaign, and its slogan was "Consume what the country produces." So, it was a very important period for promoting the country, promoting the consumption of products that Mexico produced. This program was very intense. It had the association or collaboration with the National Confederation of Chambers of Commerce. The National Confederation of Chambers of Commerce adhered to the legislative and executive project, the program, and in general, it was a very important campaign that took place in Mexico in 1932. This led to several decisions, for example, reducing imports and increasing exports, and a series of economic decisions, including import substitution from that era. A substantial industrialization began. This promotion of industry began to give greater relevance to industry over commerce, which was very important. Commerce was very important, but it also involved many imports that had been carried out for many years. Thus, the industrialization of the country also began. Investment started to become significant, and as a result, Mexico began to grow economically in 1933 in an important way. From 1933 to 1981, it was 49 years of growth for Mexico. Mexico grew at 6.2%. It had very significant growth of 6.2%, but at the same time, there was also great population growth. The population at that time was around 15% or 18% approximately. Before the revolution, it was around 15%. During the revolution, besides many people dying, many people left the country, and the Mexican population decreased. It recovered by the late 30s or by the 40s, we were approximately 18 to 20 million people, and the population also began to grow significantly. There was also a lot of migration from rural areas to urban areas. This is how cities like Mexico City and others grew. Mexico City was relatively very small at that time, especially the center, where almost the majority of the population lived. There were many other areas with development dating back to the pre-Hispanic era, such as Texcoco, Coyoacán, Tlalpan, Tacubaya, etc. Azcapotzalco had a lot of housing. A very large growth of Mexico City began.
So, that growth was very important, and particularly impactful years in Mexico were from 1958 to 1970. We had a great Secretary of Finance named Antonio Ortiz Mena. The economy grew at 6.8%. It grew at 6.8% from 1958 to 1970 with an inflation rate of 2.2%. Inflation was perhaps even a bit lower than in the United States, and it grew at 6.8%. In the previous 6 years, we had also grown very well under the government of Ruiz Cortines. Those 6 years saw good growth, but there was a devaluation. That was when the dollar, well, the peso went from 8.65 to 12.50 pesos. That was in 1954, it went to 12.50. Curiously, it devalued a bit during Holy Week, and curiously, every year before Holy Week, everyone bought dollars or believed that it would devalue every year. The peso remained without devaluation for 22 years. The peso, as I told you, was worth 12.50. Then came two other governments. In inertia, Echeverría's government had economic momentum, and with President López Portillo, there was substantial growth because oil production in Mexico was significantly boosted. I have a sheet here. The oil production was very notable, and the price of oil was also very notable. Oil had a large discount because the famous Seven Sisters bought from oil producers at a very low price, I believe it was around $3 in 1973, and it rose to $40 in those years, before falling substantially in the 80s. Here, oil production was 290,000 barrels under López Mateos, 370,000 barrels under Díaz Ordaz, 570,000 barrels under Echeverría, and 1,800,000 barrels under López Portillo. Under de la Madrid, Salinas de Gortari, Cedillo, but especially under Presidents Fox and Calderón, only 3,000 barrels of oil per day were produced. It was an income, for example, under López Mateos, $1.8 billion came in; under Díaz Ordaz, $2.4 billion; under Echeverría, $100 billion; and under López Portillo, $100 billion. From López Portillo onwards, oil production was high, and the price of oil was high. At that time, as I said, oil was $3 a barrel, but under President López Portillo, the average was $25.80 each. Then there were some drops in oil prices, but during the Calderón administration, especially the end of Fox's term and during Enrique Peña Nieto and López Obrador's terms, and currently, oil prices are $60, $70. Now, with this tragedy of wars that are becoming almost constitutional, it has gone to $5, to $100, etc. Well, oil production was very important in these periods, but I return to the past. We grew at 6.2% for 49 years. Then came a crisis, a crisis in '82 that had effects from '81-'82, with high inflation in the United States, double-digit inflation. That double-digit inflation was very delicate. The United States had double-digit inflation, and the director of the Central Bank, unfortunately, made very radical decisions and raised the dollar interest rate to 20%, 21%. So, the interest rate, which is currently at three or four, at five, was raised to 21%. And obviously, all debtor countries like Mexico, which had become indebted, Mexico's debt had risen significantly. Apart from the $100 billion from oil, apart from the rise in oil prices and income, the debt rose to $50 billion. This means we had to pay $10 billion in interest annually. This, along with all countries that had some debt, caused a major external debt crisis starting around 1982, which greatly complicated the country's conditions throughout de la Madrid's government, because there was no credit, the country was indebted, and it couldn't afford to pay that $10 billion. But it wasn't just Mexico; it was many countries, especially developing countries, that had to pay these large amounts of interest at 20-something percent in dollars.
So, this phase passed, and unfortunately, from then on, for 44 years, here I have my notes, for 44 years, meaning from '82 onwards, the first 6 years were very difficult. There was no access to external credit, there were limitations of many kinds. Then, that was liberalized in '89, and the country began to have significant economic activity. But Mexico's growth during those years was less than 1.9%. During those years, up to the present, less than 1.9%. This less than 1.9% was accompanied by population growth of more than 1.5%. This means that the per capita income growth per person was less than 0.4%, meaning income was less than 4%. I believe that based on these difficult years, some were years of very high income and good activity, but we didn't know what happened to the resources because, look, there was an amount in one government of $230 billion, in the next $466 billion in oil revenue alone, the following year $304 billion, and $251 billion. So, we had great income from oil, great income daily, we had 3 million barrels daily. So, in summary, during all those years, the total per capita income rose by 30%, which is very low. And unfortunately, there has been a significant reduction in people with employment who have had to leave or have gone to the United States to work. They speak of 35 to 40 million Mexicans in the United States, some without documents, others who, even with time and authorization, have had problems. We know, we see that the current US government has been harsh with all people, including the disintegration of families, etc. But at the same time, they have a great need for Mexico. They have a great need for Mexico because in the United States, the population is now almost entirely in services; they are no longer in industry, they are no longer industrial workers, and they are almost all, the vast majority, in services, and a good percentage are moving into technology, they are preparing for it, they are working on it. And as you know, they invented the transistor, but then all that work went to China and Taiwan, etc. It has returned to the United States, and in general, what the United States has is a very limited, weak industry because it is no longer competitive. For example, in the automotive industry, it is not very competitive, but especially, for example, in the steel industry, where they were great leaders in the golden years of American industry, now their costs are very high, their hours are low, and it is not competitive. That's why you may have heard some statements from President Trump talking about a 50% surcharge on steel imports as tariffs. They also did it with copper and other products. Well, that is the big topic. The image is the history, it is the history, but looking at things in the present, although there is some pessimism from some, they believe we are doing very badly, well, we have some problems. One of them, perhaps the most important, is the significant drop in oil production and the situation of Pemex, the situation of Pemex and the drop in oil production. I was telling you about 3,200,000 barrels, and from these 3,200,000 barrels, no, it's 3,270,000 barrels daily for 6 years. That was the Fox administration. 2,900,000 barrels with Cedillo, 2,580,000 with de la Madrid. Those are fantastic amounts. Now we are talking, perhaps, I don't know, of 1.5 million, 1,600,000, I don't know exactly how many. Let's assume it's 1.5 million barrels. Well, that is extremely low compared to what it should be. At this moment, with the price of the barrel at $100, $90, $105, $110, obviously those who are very favored are the United States. The United States, I don't know how many barrels, we are talking about 14 billion barrels daily, and probably more. Then they have exports or sales of 1,800,000 barrels of diesel daily. We know they have many refineries for gasoline. So, these are enormous quantities that they are using. And in addition to that, you know that one of the countries with the most, or rather the country with the most oil resources, is Venezuela, but from 4 million barrels it produced in one period, it dropped to 600,000 barrels. That's why it was in that situation. It dropped to 600,000 barrels, and I believe it has risen to about 800,000. They say it is now at 1,200,000 barrels, so their production has risen very quickly. So, there is very strong activity in that sense, given the great crisis that is being experienced. Well, this is a historical overview with some of the current situation. Mexico, I believe, is returning to very important potential conditions to return to its intense growth, to its greater growth, let's say, to a growth of not 1.5% as it was before. And speaking of per capita growth, it would be in Mexico to consider that because birth rates are falling significantly, and apart from the low birth rate, it's good that many people have left the rural sector. Before, high birth rates were very necessary for the whole family to work, the children, the girls, the women, the young women, etc. But now, because there has been enormous growth in the urban area, in the urban area, for example, an example I saw some years ago in the United States, the rural area was 70-something percent of the population, and then it became 2% or 3%. In Mexico, we also have significant growth in the urban area, and women, under these conditions, increasingly have a higher level of education and work. So, normally, children are born at a later age, there are fewer children, etc. Population growth is lower. And it is very interesting, for example, in our entire scholarship program at universities, especially at UNAM, there are more women than men. In all professional studies, there are more women than men. Well, in total, currently, what is Mexico's situation? We have a large number of trained women and men. We have an enormous potential of workers who are excellent, and when they go to work in the United States, we see how they progress, how the large American industries in Mexico recruit them. They are highly efficient workers. We know them; we have many of them working, working very well. And there is potential to provide more work and for there to be more economic activity, which I will discuss later. So, regarding the capacity, the training level of the Mexican worker is among the highest anywhere. In Latin America, I believe there are other places with great capacity, but Mexico's work capacity is remarkable, and the good thing is that it is leveling off, that this is starting to be linked with higher minimum wage increases, as is happening, and as has been promoted, and as the business sector is also supporting better income levels, and that also has a very important effect and will continue to have it increasingly on the socioeconomic level of the population. It is very important that the figure the government gives of 40 or 50 million people in poverty, I don't know if you have read that data, is substantially reduced, and that those in extreme poverty, even more so, but these people are incorporated into education, into work, especially into employment, with health, etc. This incorporation becomes very important because it is not only support for the population in that situation, but it is incorporating them into the economy, incorporating them into the internal market, incorporating them into the national economy, which makes the economy larger. I don't know if I am explaining myself. It is different to have 50 million in that situation than to have those 50 million integrating into economic activity, employment, work, education, and having good incomes. That is an extraordinary potential that we have and that we must develop. Wages have been improving; we are now at increasingly adequate levels, and work can complement that.
Well, so we are now talking about the current situation. One is that there is a large number of people available or in need, and on the one hand, there is a need to work, and on the other hand, it is convenient for people to be able to enter the workforce. The other things that I see very positively are, for example, the efforts the president has made to control inflation. That has been very important, that inflation is controlled, because by controlling inflation, it is prevented from skyrocketing and further affecting those who have the least, because already, or those who have a certain level of income, inflation erodes it, and then they lose their way of life with less inflation. So, she is slowing it down. The most notable way she is slowing it down is with gasoline. Gasoline, which has risen in the United States and in many parts of the world due to the increase in oil prices, here, through the JEPS tax on gasoline, she is trying to maintain gasoline prices because gasoline has many effects on public transport, general transport, and all these things. It affects a lot and has inflationary effects, which is somewhat what they are trying to curb in the United States, but it is very difficult if this lasts for many months to be able to curb gasoline prices when it is being done here. So, we have more, she is very careful with gasoline, rather with inflation everywhere. You have already seen the links to protect popular family consumption of a certain level, and that self-service stores respect or agree with it, and in the morning briefings, it is stated which stores, in which location, are selling the family package at one price or another. So, all of that is very important. But on the other hand, it is also important, from a business perspective, that the interest rate is at 6.5%. It is very, I would say, I don't recall interest rates at 6.5% and falling, so the interest rate is at 6.5%. In the periods of 6.8% economic growth under Ortiz Mena and the governments of López Mateos and Díaz Ordaz, with 6.8% growth, the interest rate at which one could buy sight bonds and such was 9% with 2.5% inflation, meaning there was a real return. Now, with 4% or 5% inflation, it is 6.5%, so the real rate. There is only a 2% additional cost. In that era, it was 9% versus 2.5%. And this low interest rate greatly encourages investment. Because what does one prefer? A company or an entrepreneur or a person to invest their savings or resources at 6.5% interest or invest them in a business project that will yield 12%, 15%, etc.? So, this makes it very easy to think that there is sufficient or much available wealth for investment. This is the investment that instead of investing at 6.5%, invests in development and industrial development, etc. But there is also bank money. Mexican banks only have, I believe, about 37% of GDP financed. When you look at Brazil, how much they have, I believe 80%, I don't know how much. So, Mexico is one of the countries where banks have the lowest amount of financing as a percentage of GDP, meaning they invest little in business financing and such. 70% to 75% in Brazil, and here 40% or 40%, and there it is 70% or 75% in Brazil. So, it is very low. This means that if industrial investment, business investment in general, or construction of everything we have, for example, in the real estate sector, in the industrial sector, in the infrastructure sector, that is very important, the infrastructure sector. There is a lot of delay, it creates a lot of employment, just like housing. I don't know if you noticed that Infonavit, which hadn't worked for many years, where the financing rate for workers at Infonavit was 2,200 or 2,something, has now gone to 6,600 pesos of financing. That is the limit, not the maximum. It's 600, right? Well, this means that before one could receive a 2 million credit, one can now receive a 6 million credit from a worker who wants a house. So, this will induce the construction of many houses. So, what is called the real estate sector, a lot of housing construction, but also, have you noticed that there is a lot of talk about distribution centers? Many centers are being built, they are built as warehouses or similar, and there, for example, commercial companies store their merchandise, concentrate their merchandise, and distribute it from there to various stores, for example, Walmart, Mercado Libre, what's its name? Amazon. They distribute, they have their distribution areas, distribution centers. And from there, meaning there is an enormous real estate construction project. Both for that reason, as I mentioned, for housing, the current development, if you look, for example, many areas already have hundreds of buildings. Yes, you have seen it everywhere, if you go towards Interlomas, hundreds of buildings. And what happens is that in my time, which was many years ago, people wanted to live in houses, not apartments. Now it's the opposite. People want apartments, but besides that, if these buildings weren't built, the expansion would reach Acapulco, I don't know where it would be. Well, exaggerate to Cuernavaca, because if all this that is built as buildings were done horizontally, it would be enormous. So, the growth in real estate investment in buildings and such is another growth in commercial areas, in commercial projects, investment is also being made. In total, the real estate issue, and I had notes here that I made last night, but I don't know where they are anymore, but real estate investment, well, hospitals are also being built, universities are being built. You know, I don't know if perhaps, because there isn't capacity to enter UNAM because so many demand it, they enter the Universidad del Valle de México, university of this, university of that, the one in Monterrey, the one in that, etc. From having had only one university, Tec de Monterrey or that, they now have many universities. Real estate construction is very large. I hadn't mentioned it before, and now we talk about infrastructure. Infrastructure is demanding a lot, a lot of labor, and that is very good. It is very good. First, because the country demands infrastructure, and second, because it is the way to provide a lot of employment. So, these are two very important factors. Now, where is the problem with infrastructure? Everywhere. For example, you know that going to Querétaro is a bit complicated with traffic, right? Well, we are already building a highway to Querétaro, a section of highway to Querétaro to open it. In two, in two possibilities, that is in the part of the, what's its name? Northern Arc. So, cars come from Puebla, from all the southeast, they come from here, from Interlomas, from everywhere, they go through the Northern Arc, and there will be a special highway that will lead to Querétaro. So, all these types of things are urgent. We have problems with water, we have problems with many things due to infrastructure. So, look, among other things, the trains that are being built, pipelines are being built, oil pipelines, for what we talked about with oil, viaducts in cities, because the traffic is unbearable horizontally, there have to be viaducts to manage traffic, aqueducts. Many cities have problems with aqueducts for water management. Water treatment plants, desalination plants for water, garbage managers, garbage management, incinerators, drills, in total, water management also, water purification, correction of urban water networks, electricity generation, wind, hydroelectric, solar, combined cycle, geothermal, transmission networks, distribution networks, which we are behind on. So, we have a countless number of needs, and we have a low interest rate that drives the availability of money to finance their execution. So, what is lacking here, and what is in process, is that we get down to doing all these types of things. For example, in the matter of oil, we need to produce oil, but have adequate refining and have the gas that is so important, not only for combined cycle and that we import from other places, but gas for petrochemicals, etc. Construction, industrial development. So, I think I have told you many things. I don't know if it's better to discuss them. Let me, some have arrived. Give me 5 minutes. Ask me. Hello. Hello. Before starting with the questions, I have to say something that I discussed here with Don Cervantes. Well, excuse me, wait for the questions. I forgot to mention that a very important thing has been done, how should I say? The president has prioritized investment, because without investment, there is no employment, no solution to these matters, things are not delayed, there is no maintenance of things, etc. So, a council has been formed. I forgot, Paco, what is it? National Investment Council, a National Investment Council presided over by Mr. Francisco Cervantes, who was induced by the President of the Republic to invite us to participate and form it. There are a little over 20 of us, entrepreneurs from Monterrey, from Mexico City, from several other places, and the intention of this council, which we have met a few times, is first to present what we are doing, what we are investing in, and what other investment alternatives exist beyond what we have been discussing. But also, since the meetings are with the Secretaries of State, the Secretaries of State get to know what is being done here and to request simplification of procedures, spaces, institutions, etc., that complicate investment. So, they are talking about a single window, for example. And there is great care on the part of the government to not obstruct investment. On the contrary, what is being done is to promote investment, and for that, as I said, there is the single window, and it has been interesting because not only is investment and the federal matter being discussed, but we are also talking with the states to make investments in the states, which are very important, and even with the municipalities. And in these meetings, each person presents what they feel is hindering them or what to do, what to correct, and they are very, how should I say, apart from direct, open, cordial. They have been important because in most of the last meeting, we presented, I am going to invest so much in such things, but other additional things arise because of this. I don't know if you want to comment on anything, Paco. It doesn't sound good. Yes, as the engineer frames it, investments, I believe, are the most important thing, and infrastructure. Infrastructure for investment is what can level us out right now, especially at a very interesting moment that Mexico is going through. Yes, true, tensions, but Mexico has the great capacity to have this Free Trade Agreement where we have 12 billion dollars daily in commercial exchange, and the technological part is improving, growing by 17%, and infrastructure, which moves the most branches of industry and especially generates employment. It moves branches of industry, it moves branches of commerce, of services. So, I believe that is where we emphasize and the facilitation, the facilitation of permits with the single window for Plan Mexico. I believe that is the great opportunity for Mexico to still be placed in a position of significant growth. Thank you. And the Free Trade Agreement made in '94 with the United States, which is now under discussion, caused Mexico to export more to the United States than it imports. To the United States, and that was because many American companies came to set up in Mexico, they came to set up in Mexico because the worker is much more efficient, costs are lower, there are no coffee breaks in the American style, and all those kinds of things. And so, Mexico's trade surplus has been very important, which I believe is around $250 billion. But also, one of the subsequent governments opened up to imports. So, many years ago, before the end of the last century, a lot was imported. I believe we had a deficit of about $20 billion because we imported a lot from other countries. So, here too, what is being promoted is to resolve import substitution, that the excess of imports, which is enormous, gives us a trade deficit of approximately $270 billion, that we begin to substitute that import with production. And today, this was not my fault or anything, I didn't do it on purpose. It speaks of a 21% surplus, a 21% increase in exports versus a 19% increase in imports. I believe it is one of the few times we have had a general trade surplus. And I forgot to mention that in '33 and in that era of '33, one of the criteria was to import less and export more to avoid capital flight, it said. So, what is happening now is also that there is an attitude of substituting imports and importing less. What the United States is doing, if you notice, it deliberately lowered the exchange rate, meaning it devalued the dollar. So, why did it make the dollar worth less? And on top of that, it added tariffs. The United States is very indebted. It is around $39 trillion, probably this year it will end with $39 or $40 trillion in debt as a peak. The debt is not only one of the largest, but it is growing. So, President Trump is suddenly tightening things up with tariffs, etc., so that Americans do not import goods. What he is looking for is for less to be imported and more to be exported, for the United States to import less and export more. This is a very important factor because, suppose the rate were 5%, it is at three, right? Three in the United States. Yes, 3.60. Suppose it were 5% and it owes $40 trillion. It will pay $2 trillion in interest, which is a fortune. Then it has the armaments that cost, I don't know what, that the budget is at that level. So, they have a huge deficit due to the fiscal deficit. The debt is enormous, and that's why they are trying to curb it. That's also why it's looking to pay less interest, and it fights with the Secretary of the Central Bank, a new one has entered because inflation is higher than the interest rate, and so it is pressing for the rate, I believe now it is lower or equal, right? The interest rate and inflation are around 13%, right? It's possible that with oil, with what's happening with oil, with the increase in gasoline, I think the interest rate is already below inflation, but even so, they are being careful because they have a huge deficit, and that is the problem of the United States. So, ours, as it looks, for example, we had an investment plan, we have made it more aggressive, we have made it more aggressive because we are seeing, as Paco said, in terms of infrastructure, there is a lot of work to be done. We have a company called Ideal, which has made great investments exclusively in work, basically in Mexico. Well, in 12 years, it hasn't had projects, or 14, I don't remember how many. And now it is doing, for example, or will do the highway to Querétaro, it is looking at viaducts, it is looking at other types of things. There it will also be necessary for the work or the facilities of the states or municipalities for infrastructure that the state does not have to finance it or the government to finance it. Mechanisms must be sought through maneuvers, for example, to provide support as a guarantee to the entrepreneur who builds it, to the company that builds it for free, a guarantee of a form of payment for the project. So, there is a lot to do. I think it will be noticeable next year, but if you want, we can start with the questions. I think they were longer than the first ones, but those are the questions. Thank you. No, ladies first, right? Then mixed. No, no. Thank you very much. Yet Arcinega from Fortuna magazine. Good morning, Yaret Arcinega from Fortuna magazine. There is a very important difference in what you were just commenting on regarding oil production. The president has often said that the objective of her government is not to reach large quantities of oil barrels as was done in other administrations, but rather that it has been limited to approximately 1.8 to avoid overexploiting the reservoirs. Do you consider that sustainability, which the president is trying to achieve with this sustainability program, is more important than the economic growth that oil production could give Mexico?
Well, what I mentioned is about economic growth from all sides, right? And for example, through infrastructure, it is very important, and through housing, it is very important, and in construction, it is very important because it provides a lot of employment. Pemex does not provide a lot of employment. In Pemex, it is the value of the oil. Once the well is opened, now extract the oil. There, I think what the president is saying is that she wants to bring Pemex to 1,800,000 barrels per day, which is a very good amount, to Pemex. At that level of 1,800,000, Pemex would be in very good condition. But remember that during the Peña Nieto administration, many international and even national companies entered tenders. So, one thing is the oil that Pemex produces, which is urgent that it does so. I believe that what Pemex should do is concentrate on producing oil. The weak point of Pemex and the country, Pemex's debts and all that, the lack of payment by Pemex, is because it has low production and a large structure, costs, and expenses. What it should do is produce oil. Now, it would have been impressive if it had, for example, 2 million barrels now at $100. Fortunately, with the oil it has, I don't know how much it is, 1,400, I don't know, 1,500 or whatever, it is selling it, it is valued at $100, so it can absorb things. So, I think she is thinking about having Pemex at 1,800,000 barrels and with large reserves as soon as possible. I imagine that is it. Probably, if oil prices rise, she might lower production a bit, or if oil prices fall, she might increase production. I don't know if I'm explaining myself, to maintain, for example, if oil is at $60 to $80 and it drops to $60, then perhaps because it has reserves, it will increase production. Do you understand? That helps it to adjust. Now, on the other hand, I take advantage of what they are going to ask about that to say, I haven't read the sheet, I have it here, that in 2 years, we think, in 3 years, I'm exaggerating, two or three years, I think about a million barrels will be produced, maybe I'm exaggerating a bit, additional, but for example, we made an agreement with Pemex, which does not have resources to finance and pay and so on. We made an agreement with Pemex to drill between 16 and 32 wells in a field called Isachi, which is a fantastic field that produces, it currently has 30, how many? 31 or 34.5. How many? 35. I didn't get it. Well, 35 wells. A while ago, a few months ago, it had 28. It has 35 wells in that large field, and there are about 20 more wells to be drilled. These 35 wells, some produce 3,000 barrels, others 5,000 barrels. On average, how much, how much do they produce? And 5,000 barrels per day per well, and they also bring a lot of gas. So, gas must also be taken advantage of because oil is exploited.
Everything, but the gas, the gas, this one, we have to take more advantage of it. So that single field will produce about 200,000 barrels, right? Within 2 years. Uh, there will be a lot of uh there will be a lot of investment in oil. There is a lot of investment happening in oil that will increase, I hope, oil production between private and public. How many, Alex? Chile, that one is not Alejandro. Where is he? How much? How many barrels? About 800,000 barrels, I think. Do you agree or not? Speak up because this well is there. There is an offshore field that the Australians are uh operating. They are starting to drill, which is about 2500 meters deep. We are associated with an American company and another English one, and with the government and with Pemex in a field that is 180 meters deep, which was very difficult to do with fixed platforms, which is being planned to be done with a semi-submersible with anchors, and we expect it to start in a first phase of 60,000 to 100,000 barrels in a year and a half or a little more, and so starting to work a million and a half, and I say a year and a half, and about 50,000 or 60,000 barrels, and then open other wells to be at levels of 90 or 100,000 barrels of oil production in 3 years or 3 and a half. Thank you very much, engineer. Uh, about what you were telling us. Yes, about what we all can. Thank you very much, madam. Hello, good day, Fernanda Celis from El CEO here. Ah, I see. Uh, well, regarding this energy topic, I would like to ask what projects uh are coming up uh through Carso and also in association with Pemex. And on the other hand, there are several uh projects that have been awarded through Carso and América Móvil. I would like to know if this is part of your closeness with the government, if there is any benefit or advantage. What else? The PM's calls. What else? Yes, if if it has anything to do with the closeness we have with the government. I don't know what América Móvil has to do with it. I think you're going in another direction. What? Of oil and also through Let's see, América Móvil is a company that started as Telcel, which entered to compete when there were already two companies, a year before. When we entered Telcel in '91, it only had 35,000 mobile phone customers. We made a proposal in something that was public, which was a 3-year project, a program to reach 200,000 customers. That was Telcel, and much larger was Yusacel and the other one, I don't remember its name. So, we were three competitors, we entered last and we entered with 35,000 customers. We made the 3-year plan for 200,000, if I recall correctly, we reached about 220 or 230. So, that was 1994. When the 1995 crisis hit, remember? of '95, which was a very difficult situation. We came up with something that was very successful worldwide, which is prepaid. So, instead of people who were in difficult circumstances having to pay a monthly fee, they bought uh cards with 20 calls or 50 calls and bought what they wanted and talked what they wanted. Yes, we derived that from the public telephone. We managed the public telephone with prepaid cards, as they are called. That's why we offered prepaid telephony. So, we started the project of making very economical phones, I mean, offering them at a very good price so that people could buy phones very cheaply, could have phones, and buy the card at their convenience, I don't know if I'm explaining myself. So, first, the goal was to have many phones, and from '95 onwards, we started to grow a lot. So much so that in the United States, we had a company with 130,000 customers that we bought about 3 years after, in '96, '97, '98, and it reached 25 million customers, and we sold it to Verizon, which was the one that gave us the MB, etc. So, the competitors had it before us. Point number one, they did something very unpleasant to us around 2009, I think it was 2010, when we were in competition. To this day, after 25 years, Telmex has not been authorized to have pay television. First, a cartel was formed, then there were others. So, it hasn't had pay television authorized by any government, including López Obrador's, who had told us yes, because it's the television companies, and it's given to the television companies, and no. Well, even so, Telmex competes without pay television. So, what they do is they sell pay television expensively, very expensively, because they have no competition, and with that, they sell their uh their What are they called? Well, that's a matter for América Móvil. On another occasion, the law states that the entity that defines interconnection charges is the IFETEL. At that time, Cofetel, it hasn't changed its name, I think it was Ifetel. So, Ifetel decided that we should pay 30 cents to the competitors and they should pay us 20 cents. So, that was the decision of Ifetel. Then a high-level public official came along and introduced a bill in Congress that we cannot, that we should not charge for interconnection. We took 2 and a half years in the Supreme Court to clarify that matter, and of course, they blocked it from being paid, etc., etc. These were the abuses that were committed against Telmex and América Móvil here in Mexico. Those are two comments, there are many. For example, those who were given subsidies in the competition, well, normally one competes with another national company, etc. There, we competed with two of the largest in the world, which was ATT, with the largest in Ibero-America, which was Telefónica. So, we weren't competing with Lupita and with No, it was Telefónica and ATT. They were the largest, one from Ibero-America and one from the world in terms of customers. And there, we functioned, well, first in long distance, we competed against ATT, the second in long distance, which was MCI, and they were associated with Banamex, associated with Bancomer, and associated with Alfa, which is one of the companies, they were also there with all of them, we competed with all of them, so, real competition. We have been practically since '91, how many years is that? About 9 plus 35 years. We have had all the competitors, all the largest competitors, enormous ones. And the truth is that the Telmex worker has been very effective, has done great things, solves many things, attends to many things, and the truth is that it is thanks to them that Telmex has survived as it has. Ah, excuse me. And then we have grown elsewhere and we are in 24 countries. So, there isn't any other telecommunications company that is in 24 countries. None. Over here, please. Thank you very much. Good day, engineer. Good day, everyone. Alejandro González from PL News. I would like to ask, you've already told us a bit about this approach with the government to not halt investments in various industries. I would like to specifically ask about the telecommunications industry, what conversations have you had with this government precisely to not halt these investments? Mainly when we are seeing a telecommunications regulatory commission with the same regulation for you, right? A 5G tender is coming up that is limiting you. So, what have you discussed with the current government to not halt these investments? Thank you. What was the first part? Yes, that we have talked with the government about investments in telecommunications. Ah, specifically telecommunications. Uh, I'll speak a little before. What has been interesting, not usual, is that there is private communication with the government to promote investment and execute investment in general. In telecommunications. Historically, Telmex and Tel have made huge investments in Mexico. From the beginning, they were stratospheric figures at first because it was about setting up the network, then setting up the fiber optic network, it has been a huge investment to build the towers, I think we have 25,000 towers, building the towers and the network and thousands of things. That has been a very large investment. Now that things are a bit calmer, with all of that, we have to make investments for more towers, have fiber optics everywhere, I don't know how much, Dani isn't here, but I don't know how many kilometers of fiber optics we have, and we have moved from copper, now we are collecting the copper for fiber optics. Copper is disappearing, which cost so many tons and tons. I don't know how many tons it could be, but this is not, it's more than 10,000 tons, many tons of copper. You still see copper, we are collecting it and collecting it and collecting it, so we are making fiber, fiber optics, fiber optics. So, that is individual work, regardless of anything else, it is very costly and requires many resources. Then, the spending is also a lot, the investment made in new customers, in having fiber readily available, because we had copper. How many houses passed? I think we have about 15 or 20 million with copper that have been disconnected. Now we have about 600,000 or 700,000 houses left with copper, of which about 90,000 are in rural areas, where we cannot manage, we don't manage the fiber, but the copper is there at a very low price and with 15 megas, right? Here, at the end of the 20th century, we experienced, remember what the companies that had internet were called? America Online. American American Online, which had pure copper at 56 KB. Yes, now we talk about 1000 megas, 500 megas instead of 56 KB, and it reached a valuation of 100 billion dollars or so. It bought Warner Time Warner, don't you remember? And it bought it with money, it was paper, right? It was the value of the shares. It gave shares in exchange, boom, it became Time Warner and American Online. So, the investment has been huge, but it's because there's a lot of substitution. It keeps substituting, substituting, substituting. Right now, the work is to lay cable and remove copper, right? This year, we are planning to eliminate about 400,000 copper lines or more, if possible, and to have, I think by next year, we will have pure fiber from 4G to 5G. Well, and obviously in the towers and in the work that has been done, we have had 5G for many years, we announced it, not everything is 5G, but the majority, but we already have a lot of 5G in the 24 countries, so, not just Mexico. We have a lot, a lot of 5G, but there are countries, very curiously, Argentina was one of them a few years ago, I don't know if it still is, where people for economic reasons stayed with their 2G, because with 2G, you had to have it, which Telefónica did in Mexico, which I think was a big mistake, when it no longer had, when it had at least 3G in its networks, you disconnected the 2G users. We think we haven't disconnected the 2G users. I don't know if someone, we don't give, we let whoever has a 2G phone continue using it. We don't disconnect 2G. Now, what investment do we have? Well, we have a lot of investment in 5G. We have about 27, 26,000 towers, 26,000 towers. So, we are putting 5G on them. There are still places, uh, where there is no connection in some sections, etc., etc. Since the president, López Obrador, was interested in statism. That's why the airline bought Mexicana de Aviación, the bank, this one, that one, the other one, and in telecommunications, Altan, which had been launched before by the Peña government, or a bit earlier, I don't know, went bankrupt. It owes 30 billion pesos, I don't know how much it owes. The government bought it, it's the one managing it, it mainly has only one client, but it's very happy with its single client, but it's the one that is supposed to be the network or do the work in marginal areas. No, it's kind of between the Federal Electricity Commission, which has the telecommunications part, and Altan, it's called Altan or Altan, they are looking to provide service in the marginalized, more than marginalized, remote areas or where there are no networks, etc. That's the question. Thank you from this side, engineers, you can't ask the question all together. Uh, thank you, engineer Juan Carlos Villarruel from Consumo TIC. I would like to ask about the registration of telephone lines in the case of Telcel, how are you doing with that number, and if in that case you would be proposing an extension, and in the case of economic competition, what does it mean for Telcel to be from Telefónica or, well, the purchase of Telefónica by the consortium? Thank you. No, I think that Telefónica has been very sad because it was the leader in Ibero-America and has already left almost all countries, it only has Brazil left, where it wants to stay in Brazil, but it has already sold all of them, except, let's say, one. So, it has sold all of them. Now, in Mexico, for a long time, because the rent in Mexico is very expensive, unfortunately, the rent for spectrum, etc., is very expensive, it preferred to cancel its spectrum and joined with ATT to become MB, right? So, there it saved on the spectrum and I and what it's doing in Mexico is not unique. It has sold Argentina, sold Peru, sold Chile, sold everything. It only lacks Venezuela and has been a leader in Brazil, we are already matching them in Brazil. It decided to only, also in Spain, it has reduced its size, its dimension, so it is, as I understand it, in England, Germany, Brazil, and Spain. That's the question. Yes. And the telephone registration, it's Ah, well, the registration is something very complicated. I think first, it's growing more easily in post-paid, but the time is too short, so it's slow for everyone. We think we are going relatively fast to do this registration in post-paid because with all the new ones and so on, that registration comes in, and I don't know exactly how it is for prepaid. I think they should re-examine it to see what makes it more effective for the convenience of the customer and the authority, but it's in process. Millions of registrations are being made, but remember there are about, how many will there be? 140 million or more customers, right? Let's see, what else? Engineer, good afternoon. Here, I don't know if the cameras are in the way. Good afternoon, Andrea Navarro from Bloomberg. Why don't we finish with one side first and then with the other? A few days ago, Moody's downgraded Mexico's credit rating. How concerned are you about the country's ability to maintain investment grade? And on the other hand, can you give us an update on the status of the La Cacha project you have with Pemex, one of the projects that Moody's downgraded and the CCH oil project. Of whom? La CAS, which was the gas one. Ah. Uh, where do you start? Look. Regarding the gas from La Cacha, uh, we looked at it. The initial idea was for four of us to enter, then for us to enter. So, we were looking at it, it's not audible. And it turns out that it's irrational, it turns out that it's, I think, at 900 meters, then it's about 65 kilometers from land. So, managing at 900 meters, and then it turns out that what four wells do, they tell me four wells, but let's say six from Cacha, is the same gas that comes out from 65 kilometers away at such and such. Pemex had made a significant investment there, well, it's said to be more than a billion dollars, they have material for the place and so on, but it's irrational to look for gas 65 kilometers from land, which has to be transported there, with a gas management network at 900 meters, when the gas that comes out of Itachi on land from four wells is the same gas you have there. So, it's irrational to start acting and operating in a place when there's a place on land. We are talking about 35 wells. They have a quantity of gas, in value, I think it produces as much gas as oil or more. So, what needs to be done is to use that gas, not to go 65 kilometers away and make billions of dollars in investments, uh, irrational, excuse me, from the project, we will withdraw from the project, right? We already are, right? Well, we never entered, or almost didn't enter. We did the studies and so on, Pemex already had it, had already advanced it, had a large investment and had the material for the most part. And regarding Moody's, the credit rating. Ah, well, what can I tell you? I think it's Moody's and Standard & Poor's, right? There are many intellectuals who become critics. Look, I think one of the mistakes that has been made, I recommend reading Guillermo Tovar's book "History of Mexico." I think there have been many technocrats with perfect scores from US universities who come to the most important financial areas here. So, that's why we grew at 1.4%, 0.3% with those excesses, when, for example, there were 466 billion dollars in revenue, where are they? What did they do with them? It was a huge amount of money to invest. So, I think the investment fell very short, and then they liked to make fiscal reforms, there's no need to make a fiscal reform. They made the fiscal reform, inflation rose, interest rates rose, and it became complicated because then investment was halted when you have interest rates of 20%, 15%, I don't know what, then inflation is halted. So, I think right now they are insisting a lot that the debt will go to 60% of GDP, because they think that this year the country will not grow, will not grow, let's say it grows six and has a fiscal deficit of four, then it has already increased by four points. The, yes, do you understand? If it grows at one, then three, but if it grew at three, it will be if there is no fiscal deficit, I don't know if I'm explaining myself. So, they are already predicting that it will be 60% by the end of the year, as if it were religious. But that 60% is not very high either, because the US's is, but Brazil's, how much is it? We have several figures there, right? It's around 80%. And why is Brazil doing so badly? Because I would say that exaggeratedly, the interest rate in Mexico is 6.5, in Brazil it's 15. 15% is the interest rate. So, there, obviously, it draws you more to invest in interest rates, to invest in making material investments, I don't know if I'm explaining myself, with 15% interest, why would you want more, because inflation in Brazil is also very low. So, it has a real rate, it's the highest real rate there is right now, I think in, I don't know, in Latin America for sure, elsewhere, I don't know. So, well, the truth is, those who say that it is very indebted and therefore its level and grade are lowered. Well, two or three people decide that, and what they should look at is what it is investing in. But if we manage to start investing and growing as expected, that rating is irrational. That's my opinion, it doesn't worry me at all, although it has effects, and then they say that investment is halted and that it no longer has access to external financing, and other nonsense. Engineer, good afternoon. Here, I don't know if the cameras are in the way. Good afternoon, Jimena Tolama from the podcast "La estrategia del día" from Bloomberg Línea. Listening to you talk about investments, I see you enthusiastic that President Claudia Sheinbaum is prioritizing investments. What makes you enthusiastic? Who? You. You see me enthusiastic. I see you enthusiastic. Imagine what happened in '82 and '83 when no one was investing. Okay. In that sense, would you participate in the projects of this infrastructure law that the president is promoting? And if so, in which ones would Grupo Carso be involved? Do you plan to invest? that we are interested in participating in infrastructure projects and in which ones specifically as Ah, well, I already told you which ones, for example, we are building gas pipelines, building gas pipelines, we have been doing Pemex projects for many years. We used to build platforms for Pemex, which are not being built now. The Jacob for drilling, which we will now use for ourselves, the Jacob, and drilling. We have 19 drilling rigs, and 12 of them stopped being used for 12 years or more. They are not used. They were not used in the past government, nor in previous governments, nor in Peña's. They are there, stopped, the two rigs. Well, one is being used for geothermal energy for Pemex in Cerroprieto in Mexicali, and I think that one is rented. That one and I think there was another one rented, but now with these, we are proposing to those who are working on land that they use our equipment, rent the equipment from us and work with our equipment. We are in talks with them, mainly with private companies. And listening to you talk about interest rates, I remember you saying in 2019 that it was a paradise to invest in Mexico precisely because of the interest rate, when at that time it was around 8%. Today we are two points lower, 6.50%. Do you still consider it a paradise, or how should interest rates be managed? Well, I think being able to have financing at 6.5% is a paradise. Let's say they lend you at 7.5% or 7%, or the famous "ebures" from the stock exchange that are placed for financing through stock certificates that lend you at 7.25%, at 7%, at 7.5%. It's fantastic. I don't see it. And why was it a paradise? I don't remember. What was the rate? Well, look, it's more of a paradise now because a rate of 7%, financing at 7.5%, no, man. Even for mortgages, for example, for all housing programs, private or Infonavit or whatever, having interest rates of 7.5% is excellent because inflation is around 4%, 4.5%, so you are paying a real interest rate of 2% or 3%. This is more of a paradise than in '19. Hello, Adriana Urrea from Amexi News Agency. First, I want to ask for your opinion on security issues, especially situations that have occurred, for example, with Governor Rocha Moya and all this situation. No, don't ask me about that. Ask me about investments. Well, I want to ask you about another aspect, engineer. Telmex could go on strike next Friday because an agreement has not been reached with the workers on benefits and the opening of positions. How is this going and what message would you send to the workers? And finally, your perspectives on the 2026 World Cup. Thank you. Look, regarding Telmex, I'm not involved or doing anything, and I don't even know what's happening. I think you know more than I do. Now, what I can say is that the personnel is excellent. There has been a delicate problem in Telmex, as there is in Pemex and elsewhere, that they left it with a retirement age of 48 and 53 years, which is outrageous. So, we have enormous retirement ages, which hit Telmex very hard, and with the limitation, etc. So, it doesn't have a great uh, but we are looking at other alternatives to try to, there are about 41,000 retirees, many more retirees than And what is the reason? Early retirement is complicated. That's a bit what's happening, I imagine, in Pemex, so salaries are being negotiated, but I don't think they are doing too badly. I will inform myself, excuse me, World Cup. Your expectations for the World Cup. Ah, I see France and Spain. Oh, no, well, no, I can't say who will win or what. No, look, I think we should win, because they say that so many billions of pesos will come in, but a lot. So, I think that's the attractive part, the good part for Mexico, even though it's only a few games and all the costs of the venues and everything are very expensive, I think it's excessive. Engineer, from this side, Rosa, good afternoon. I'm going to get dizzy. Gabriela Frías from CNN greets you. I wanted to ask you, did you speak with the president the other day? I spoke with you the other day and I told you about President Trump and what you thought about President Trump. But today I want to ask about investments because you said that businessmen are meeting to talk about investment commitments. I would like to ask you to share with us how you are addressing the issue of insecurity or security and legal certainty, what local and foreign businessmen are asking for to have greater confidence to invest. How are you addressing it in those meetings? What are you thinking of doing or asking the federal government? Thank you. In summary, just legal certainty and what, and general security, security for companies, for workers, and then legal certainty for the investments to be made. Well, the program, but I think that all the legal certainty, well, I don't see it as serious, I never see that governments, look, first, we are talking about when I spoke to you about 1933, 34, there have been many presidents, none have been re-elected, and they are from the 4T, from the PRI, from the PAN, from all sides, they have not been re-elected, which is very important. And I think I haven't seen any policies of expropriation and so on, rather they buy things. For example, they bought Altan. They also bought Mexicana de Aviación. So, I don't see many problems there. It's not a point of discussion as far as I can see. Are we going to finish now? Hello, good afternoon. Thank you very much, Cassandra Gerson from Reuters. I would like to ask if there are new conversations with Pemex for new mixed contracts or in other areas, and if you are also interested in participating in fracking projects once the expert group decides whether to approve Mexico moving forward with that to increase natural gas production. I'm running out of people. That new projects, if we are looking at new projects at Pemex, and if we are interested in entering fracking projects, no, because we are already saturated. So, look, we are working on the Itachi one, which we are financing at 21 months per well, so it is being financed in such a way that it becomes payable by the well itself. No, we are not thinking about more projects at the moment. We have the one we bought from Petrobal, we have Sama as a partner, etc. So, we are not thinking about more projects. If you want, one more from this side and two from that side, and we'll finish. Okay? Or should I leave Arturo to answer you? How are you, engineer? I'll leave you to Arturo. How are you, engineer? Good afternoon. Pablo Chávez from Aviación 21. I would like to know your opinion on the country's airport infrastructure, how you see it for the coming years, and following the cancellation of the new airport for Mexico City, in which you were very involved previously, I would like to know your point of view on the development of the Mexican airport system. Has it been what was expected after the cancellation of NAIM, or would it be necessary to revisit the issue of a new airport like the one in Texcoco? Thank you. No, I think it would have been very good if it had been built there in Texcoco. There was no confusion there at any time, I don't know who spread it. I had no participation, no interest in being a partner or of the airport. What we had was that the construction company had a section of work there. H. So, what caught my attention the most when I understood the airport well was that it was in the middle of the marginalization in Mexico City, in the northeast. So, the airport was in the middle of all that area, and what I said was that it could lead to making the middle class of all that personnel. So, that was my objective, not just the airport itself, but everything the airport meant in bringing the middle class to all the population, which was about 6 million people. Okay. No, there's only a little left. I'll leave it to Arturo, right? Just the Trans-Isthmian. Uh, the Trans-Isthmian, what, the Trans-Isthmian, it's said that it will be one of the great drivers for the growth of No, I think it needs to be fixed up a bit because this is Porfirio Díaz's. Hello, good morning. But, well, are you staying with them? Well, well. Good morning. First, I would like to ask what you discussed yesterday with the president of the Supreme Court of Justice. Also, you just mentioned that during President Andrés Manuel's term, it was discussed that obstacles could be removed for you to have a television concession. What happened in that matter? And in this Manichaeism about where the economy is going. A very interesting and important conversation because many years ago we had a bail program for people who were there or were innocent or were poor because they couldn't pay their bail or whatever. So, we are talking again to re-establish, to restore that support for people who are there because they are poor or are innocent and are still there. So, that was the conversation. Well, thank you very much for this year. The, what, the investments, how much are we going to invest this year? Phew, 5 billion dollars, more or less. More or less. Thank you. Yeah.