Mexican Congress Approves Energy Reform; US Companies Likely To Benefit
United States energy companies are anticipating an estimated $20 billion investment opportunity analysts say will be a result of the end to the 75-year state oil monopoly in Mexico.
Mexico's Congress gave formal approval to a bill on Thursday that is seen as that country's most significant economic reform package since the signing of the North American Free Trade Agreement — NAFTA — 20 years ago.
When President Enrique Peña Nieto came to the bordertown of Ojinaga, Chihuahua on Thanksgiving Day, he told his audience that opening up oil exploration and extraction to foreign contractors would transform Petroleos Mexicanos, an inefficient, often corrupt institution that has for decades wielded enormous political power.
They believe Mexico is handing a critical natural resources to foreigners.
"At the rate that Mexico's oil production has been declining, it stands to become a net importer of oil in a decade. Currently, the country ships more than a million barrels of crude a day to the United States but has to import gasoline because it doesn't have the capacity to refine sufficient quantities to meet domestic demand."
The majority of Mexico's state legislatures are controlled by the ruling party PRI-led alliance pushing the package reform.
"At the rate that Mexico's oil production has been declining, it stands to become a net importer of oil in a decade. Currently, the country ships more than a million barrels of crude a day to the United States but has to import gasoline because it doesn't have the capacity to refine sufficient quantities to meet domestic demand."