Mexico on right track with energy reforms
For years, we've been calling for energy reforms in Mexico. Thankfully, they are here, as Allan Wall reported this week:
"On April 30th, President Enrique Peña Nieto had submitted the proposed reforms to the Mexican Congress. The package was eventually passed by both houses of Congress, and sent back to the President on August 6th.
So on August 11th, 2014, President Peña Nieto signed the 21-part reform. “This is the moment to put the energy reform into action,“ he announced when signing.
The signing ceremony was held at the Palacio Nacional, Mexico’s ceremonial capitol building, where President Lazaro Cardenas had signed the decree establishing PEMEX back in 1938.
This is a major reform, opening up Mexico’s energy sector to investment by private, even foreign companies, which can bid for the rights to drill in specific fields and share in the profits. In the past companies could only be subcontracted.
The reform also allows the private production of electricity.
And it involves a lot of legal structure to make it function, including regulatory and oversight agencies. The goal is to make Mexico’s oil industry more transparent, which is important to investors.
Mexico’s state oil company PEMEX (Petróleos Mexicanos) still exists, but the reforms are intended to make it more autonomous and more competitive. "
It didn't just happen. It took some incredible leadership by President Pena-Nieto who put together a coalition of the willing and had to fight the left at every step.
The reforms will allow Mexico to drill for more oil and refine more gasoline. It will also open up some incredible opportunities for US energy companies. In fact, the biggest beneficiaries of these reforms are US energy companies who will now have access to a market closed for almost 80 years.
Best of all, it's nice to see a president get together with members of the legislature and solve a problem.
Wouldn't it be nice to see some of that in Washington DC?