President Enrique Peña Nieto’s promised energy reform amendment to Mexico’s constitution passed Congress Dec. 12, paving the way for state governments to ratify the amendment and new rules for the country’s energy production and transportation to be written in the 120 days following.
Since an amendment passed in 1938, Mexico’s oil and gas industry has been the sole province of the state, administered by Petróleos Mexicanos (Pemex). Service contracts for outside companies were conceded under reforms in 2008, but the amendment as passed has provided the Congress with considerable latitude to allow private and international investment in all aspects of the energy business. Oil itself will remain the property of the Mexican state, but booking reserves will no longer be prohibited and the legislature is charged to create a framework that will “maximize the Nation’s profits.”
With most statehouses held by the president’s PRI party, the amendment is expected to be ratified smoothly.
Further reading on:
Context and scope of reforms, Energy Reforms Would Open Mexico’s Petroleum Industry To Global Investment, Pipeline & Gas Journal, October 2013
Possible energy resources, Mexico Congress Passes Historic Energy Bill, Wall Street Journal, Dec. 12
Impact on Mexican economy, Mexico courts foreign investment with energy reform, Financial Times, Dec. 12
Impact on Mexican public, Mexico’s Pride, Its Oil, May Reopen to Big Multinationals, New York Times, Dec. 12
Legal framework, Sweeping Reforms Expected to Revolutionize
Mexico’s Energy Sector, Mayer Brown, Dec. 10