Written by Robert J. Downing.
WHY THE CHANGE? In less than six months, Mexico’s energy industry will be changed forever. To understand the resulting business opportunities, business needs to know why this happened. Mexico’s energy sector is often regarded as one of the most closed systems in the world. Declining oil production since 2004, doubling natural gas imports from the U.S. since 2009, outdated electric infrastructure and formidable manufacturing competition from Asia spurred Mexican officials to reconsider Mexico’s 75-year-old restrictions on foreign investment and participation. Prior energy reforms, including in 2008, didn’t go far enough to incentivize foreign direct investment. Mexico looked to the U.S.’s shale gas revolution to meet its growing demand for natural gas. President Enrique Peña Nieto acknowledges that to compete, “la apertura” (the opening) is essential.
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Courtesy of Shale Oil & Gas Business Magazine.