In the December 2013 issue of ALM’s “Focus Latin America” (a supplement to the American Lawyer, Corporate Counsel, and Daily Business Review), the headline article is about how many Latin American countries are awaiting energy reforms to stimulate growth and large returns for clients in Latin America.
Since 1938, Petroleos Mexicano (“PEMEX”), an entity controlled by Mexico held a monopoly vertically and horizontally across almost every facet of the petroleum industry.
Last week, Mexico’s Congress approved a bill that privatized the industry by allowing PEMEX to partnership with foreign oil companies–a remarkable concept that was argued so vociferously on the Congress floor, that one Congressman stripped down to his underwear in an analogy to Congress’ stripping Mexico of its natural resources.
One of the reasons that the Mexican Congress finally allowed a more open petroleum industry is because oil production is down nearly 25% since 2004–in spite of increased investment in the oil industry by PEMEX.
This move is remarkable because it is one of the top five crude exporters to the U.S., shipping more than 1 million barrels per day.
“The opening of Mexico’s markets to put it bluntly, we believe is very good for the people of Mexico and the people everywhere in the world that uses energy,” William Colton, Exxon Mobil’s vice president of corporate strategic planning, said in a webcast before the vote Thursday. “It’s win-win if there ever was one.”
Bloomberg estimates that natural gas production will almost double to as much as 10.4 billion cubic feet by 2025 from the current output of 5.7 billion feet.
The Bradshaw Law Group has extensive experience in putting together private offerings for junior oil & gas and mining companies in Latin America. Contact us now to set up a free consultation.