Mexico Set to Open Oil Fields to International Companies
Mexico is considering abandoning some of its state-controlled monopoly on the production of oil, Bloomberg reports.
After 75 years of control by the state-owned company Pemex, Mexico’s oil fields may become the next center of attention for international oil giants. Amid a sluggish economy and sinking oil prices — which decrease the value of the monopoly to the Mexican government — president Enrique Peña Nieto has decided to move ahead with the privatization of parts of Mexico’s oil production process.
Analysts estimate that the privatization move could more than double Mexico’s oil production in the coming years. If Mexican oil production doubled, it would add approximately 2.5 million barrels of oil into the world market per day. In addition, it would bolster North American oil production, which is already on the upswing thanks to increased production in the United States from shale reserves. Thus, the move could make North America even more valuable in terms of energy capacity.
Top American and international firms are already beginning to eye Mexican opportunities, despite the bill still having to be ratified by several conglomerates. However, with the bill passed in the Mexican Senate this past week, its future seems bright.