Mexico to free up gas and oil to private firms

 
City A.M. Reporter
MEXICAN president Enrique Pena Nieto is planning to open up the state’s gas and oil industry to the private sector in the hope of netting billions of dollars investment.

The move would allow Mexico’s state-owned Petroleos Mexicanos (Pemex) to develop certain fields with others being tapped by foreign and private companies. Pemex would remain state-owned.

The proposal would involve amending several articles of Mexico’s Constitution and would need two-thirds support from Mexico’s Congress. However, officials believe they can get at least one of the two main opposition parties to back the plan. Negotiations are likely to start after July local elections.

For Mexico, the overhaul could be the last chance to get the cash injection needed to develop deep water reserves and to avoid becoming a net importer of oil. Pemex officials have warned it would become necessary to import oil from as early as 2020 if no alternative solution is found.

For private firms, it would give unprecedented access to the major crude-oil producer, which is also said to have the world’s fourth-largest shale reserves.