Mexican energy reforms clear final hurdle of state approval


Mexico’s sweeping energy reform clears its final major hurdle, as San Luis Potosi becomes the 17th state legislature to give rapid-fire approval to constitutional changes that will allow foreign investment into what has been a 75-year-old state monopoly.

An influx of Mexican oil would contribute to a glut that is expected to lower the price of Brent crude, which has averaged $108.62/bbl YTD, to as low as $88/bbl in 2017; Exxon's recent prediction that North American production would vault ahead of every OPEC member except Saudi Arabia doesn’t even take into account any changes in Mexico.

Although the first Mexican opportunities may go to the major independent oil companies in the U.S. and Europe, Chinese groups such as Cnooc (CEO) and Sinopec (SNP) will actively seek opportunities; Mexico's president plans to visit Beijing in 2014 and his trip may reveal whether Chinese firms are acceptable partners.

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Comments (2)
  • stocknerd
    , contributor
    Comments (1503) | Send Message
     
    A glut? Not soon. It will take years before the Mexican oil makes to market and is used.
    16 Dec 2013, 07:42 PM Reply Like
  • Lordparrot
    , contributor
    Comments (53) | Send Message
     
    Agree with stocknerd, besides the reform, the most important part has to do with the secondary laws that will in practice rule the implementation and the entry of the major players, this won´t be ready until at least 2Q14
    17 Dec 2013, 03:07 PM Reply Like
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