Several years ago, I had the opportunity of serving on an advisory committee appointed by the Mexico Trade Commissioner who was based in the Dallas, Texas regional office. The advisory committee’s focus was trade and tourism between Mexico and the US. The committee was comprised of US and Mexico business representatives.
One issue that was addressed was US and Mexico energy relations. Since 1938, Mexico has been under strict governmental guidelines with no privatization in place.
In August of this year, President Enrique Pena Nieto proposed plan to open its oil and gas sector to foreign investments through private-public partnerships.
Also, in August, I was interviewed for an article in the Wall Street Journal’s MarketWatch regarding the issue of “why foreign oil forms should look to Mexico”.
I share with you some of the questions that were asked and the answers that I provided:
1) From an energy commodity standpoint, what does an open Mexico energy market mean—would opening that market up be substantial for oil or natural gas? How so?
Over the past several years, there has been an oil production decline in Mexico. Mexico has strong potential to enhance oil and gas production by the support of US technology alone. With US technology and expertise, Mexico and North America could potentially benefit in a very positive way. With that said, there are a lot of details to work out.
2) How long, realistically, might it take to get the proposal approved? What’s involved? It is my understanding that the proposal has a strong chance of passage. There is opposition to the proposal. Introducing a private-public partnership is new to a country which has not allowed the needed expertise to advance the needed economic benefits. Therefore, many US companies will be interested in the potential opportunities but with caution especially in the early stages.
3) How long before foreign companies jump in and how willing will they be to participate in Mexico?
It appears that US companies are interested in the potential but there has to be certainty of stability before US companies spend the billions of dollars necessary for oil and gas development.
4) Which nations or companies might benefit the most and why? Service and supply companies in the early stages will probably benefit the most. There is a question to be addressed whether only majors will be involved or will there be opportunities for others to enter the market.
Go to www.peoplesenergyplan.com to join the effort of striving toward “creating together the people’s energy plan”.
Facebook: America Needs America’s Energy with 6500 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!