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Mexico unveils radical bill to open up energy market

  • Legislators in Mexico are today due to start debating a draft bill to open up the country's energy industry and end the decades-long monopoly of state-run Pemex, which suffers from inefficiency, falling output and chronic under-investment.
  • The measures would allow private oil companies to explore for, produce, and refine oil and gas, as well as share and market the resources they extract. Firms would also be able to include the projected income of long-term contracts on their balance sheets, something that is crucial for obtaining funds. However, the proposals stop short of offering firms full-blow concessions - a loaded term in Mexico.
  • If the bill becomes law, it could add 50-100 bps to Mexico's GDP and prompt rating agencies to give the country's debt a positive outlook, says economist Pedro Tuesta.
  • Congress is expected to pass the legislation this week, as it's supported by the main opposition party as well as by the government, although it faces significant public hostility.
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Comments (8)
  • stocknerd
    , contributor
    Comments (1238) | Send Message
     
    I have lived in mexico sincce 2005. This will have a hard time becoming law. PEMEX officials are too bust stealing money. There is a radical far left who will fight this every inch. Certainly no American oil company will ever win a contract.
    8 Dec 2013, 08:50 AM Reply Like
  • stvrob_63
    , contributor
    Comments (454) | Send Message
     
    If its not an American company its not going to get done. its pretty clear they are looking at the Eagle Ford extension across the border.
    http://bit.ly/1cumaRn
    8 Dec 2013, 01:07 PM Reply Like
  • anarchist
    , contributor
    Comments (1218) | Send Message
     
    I just returned from living in Mexico for eight years and I agree with you stocknerd. PEMEX is rumored to be tight with the Colombian drug cartels as well as Mexican mafia. Its hard for me to think that a lot of legislators wont be 'persuaded' not to give this law a thumbs up and as you suggest it will be very unpopular with the citizens, not that the legislators give fig about what's popular with the people but, as I said, I'm sure they will be enlightened as to the dangers of voting for this bill.
    8 Dec 2013, 02:36 PM Reply Like
  • evan.prospect
    , contributor
    Comments (687) | Send Message
     
    Is PEMEX allegedly close to the drug cartels because the officials launder money for the Columbians?

     

    Off topic, but how is Mexico City or are there other big Mexican cities you recommend visiting? I've never been to any of Mexico's business centers, only to the beaches so am curious.
    9 Dec 2013, 12:24 AM Reply Like
  • Petrarch
    , contributor
    Comments (629) | Send Message
     
    good news. this a must for Mexico.
    they just need to be confident in their sovreignity and rule of law
    resource nationalism is a dead end
    P
    8 Dec 2013, 10:34 AM Reply Like
  • stvrob_63
    , contributor
    Comments (454) | Send Message
     
    They see this and wonder what if?:
    http://bit.ly/1cumaRn
    8 Dec 2013, 01:04 PM Reply Like
  • RSDallas
    , contributor
    Comments (2) | Send Message
     
    Capital has to go somewhere.
    8 Dec 2013, 02:33 PM Reply Like
  • chfp
    , contributor
    Comments (525) | Send Message
     
    I wonder how much of a hit the cartels are taking from the legalization of marijuana. Hope it keeps drying up their money.

     

    Enough of the nasty shale oil. Money is better spent on smarter energy strategies than paying off Mexican legislators and drug lords.
    9 Dec 2013, 10:36 AM Reply Like
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