Nationalization of the electricity supply industry, begun in 1960, was completed in 1975. Total installed generating capacity as of 2001 was 40,518,000 kW, compared with 27,338,000 kW in 1988. The amount of electricity produced in 2000 was 193,900 billion kWh, of which about 17% was hydroelectric, 76% from fossil fuels, about 4% nuclear, and the rest from renewable sources. Consumption of electricity in 2000 was 182.8 billion kWh. The possibilities for geothermal electrical production are extensive, with over 100 thermal springs available for exploitation. Petroleum accounts for more than half of Mexico's energy consumption.
Oil seeps were first documented in Mexico in 1543; the first oil wells were drilled in 1869. The first major discovery was the La Paz No. 1 well in the Ebano-Panuco Field in 1904. The petroleum industry was nationalized in 1938 and has since been operated by a government-owned institution, Mexican Petroleum (Petróleos Mexicanos—PEMEX). The Petroleum Law of 1958 permitted PEMEX to take over all concessions held by private firms and granted it a monopoly over the petroleum industry. As of 1999, PEMEX was the largest civilian employer in the country, and the single most important entity in the Mexican economy. PEMEX is also one of the world's largest oil companies. As of 2000, PEMEX was developing offshore basins in the Gulf of Mexico and constructing a new natural gas processing plant. Reversing earlier promises of privatization, as of 2002 President Vicente Fox was advocating reorganization and modernization to make the giant oil concern run more efficiently.
Proven oil reserves as of 2002 were 26.9 billion barrels, second in the Western Hemisphere after Venezuela. Although the government restricts exploration and exploitation of petroleum deposits, some foreign and private exploratory drilling has been permitted. Producing fields are along the Gulf of Mexico coastline from the state of Tamaulipas to the state of Tabasco, with the richest concentrations around Tampico and in Veracruz and Tabasco. The majority of oil production comes from the Villahermosa District in the state of Tabasco and the offshore wells of the Bay of Campeche. The same two regions dominate in the production of natural gas; in 1999, Mexico produced 36.5 billion cu m (1.29 trillion cu ft) of natural gas (mostly from offshore sources). Proven reserves of natural gas—the fourth largest in the Western hemisphere—were estimated at 835 billion cu m (29.5 trillion cu ft) in early 2002.
Crude oil production first reached one million barrels per year in 1907. Mexico's production rose rapidly during the 1970s, peaking at 3,015,000 barrels per day in 1985. It stayed at about2.9 million barrels per day through the late 1980s and then rose to around 3.1 million barrels per day in the early 1990s. Production in 2001 was 3.6 million barrels per day. Mexico exports about half the oil it produces, mostly crude oil to the United States, Spain, and the Far East. In 1999, petroleum export revenues amounted to $8.6 billion.