The State of Mexican Energy Reform: A Conversation With Tony Payan
HOUSTON, Texas — In this Fronteras Desk web exclusive, we learn about the current state of energy reform in Mexico, its effect on social and political change and the opportunity for U.S. energy companies in Mexico’s recently-opened domestic oil and gas markets.
The wide-ranging conversation with with Tony Payan, director of the Mexico Center at the Baker Institute for Public Policy at Rice University in Houston, focused on the links between energy and economic development.
Payan details how and why Mexico has decided to allow foreign energy companies to enter Mexico’s oil and gas markets. Mexican President Lázaro Cárdenas nationalized Mexico's energy assets in 1938. Payan posits that the opening was prompted by the reality that Pemex, Mexico’s state-owned energy agency created by Cárdenas, needs foreign expertise and capital to retool its under-performing energy sector. Mexico’s federal and state governments have long depended heavily on revenue from Pemex but production has fallen dramatically since 2006. In addition, low crude oil prices and frayed domestic politics represent a challenge for Mexico’s energy industry.
EDITOR'S NOTE: Fronteras Desk reporter Lorne Matalon is the 2016-17 Energy Journalism Fellow at the University of Texas at Austin's Energy Institute and KBH Center for Energy, Law and Business.