Mexico signs wide-ranging energy reforms into law
The President of Mexico Enrique Pena Nieto has signed into law landmark reforms of the Mexican energy industry, fulfilling in part a campaign pledge to make the Mexican economy more competitive.
Bloomberg reports that the law is the last step needed to end the monopoly on the Mexican energy industry held by the state oil company Petroleos Mexicanos (Pemex). The Mexican government estimates these measures alone will add one percentage point to Mexico's GDP by 2018.
During a speech at the National Palace in Mexico City, Nieto celebrated the new law by saying, "The energy reform opens a great opportunity for Mexico, and we need to seize it with complete and fast implementation. I've told different areas of the government to accelerate all of the measures necessary to put this reform into action for the good of Mexico."
Nieto has previously been successful in passing reforms that privatized more of Mexico's telecommunications and finance industries.
The privatization of Mexico's energy industry comes after a string of disappointing financial and production results. Pemex's production estimates for 2014 reached a 24 year low of 2.44 million barrels of oil a day. They were revised down from 2.5 million barrels July 25, according to Bloomberg.
The laws Nieto signed lay out the guidelines and rules for private investment in oil and natural gas exploration and extraction.
There are proven oil reserves in Mexico estimated to hold 13.45 billion barrels. Bloomberg says that in March, Pemex asked to retain control of the proven reserves, allowing foreign competitors and upstarts to explore for oil elsewhere, and in the oceans off Mexico's coasts.
Reuters says that the reserves Pemex will retain control of will be revealed Wednesday, August 13. The first auctions for prospective oil and gas reserves are expected to begin sometime in 2015.
The new reforms will also open the market for electrical generation and services.
Mexico is the 15th largest economy in the world.
