August 21, 2013
The news in Mexico is to produce a free market enterprise in energy. The power for business is more open market to energy capture and production. Consider the streamlining legislation to allow for privatization and the expansion of commercial energy production to support Mexico. The focus on oil and gas globally is delivering new opportunities that are “Important energy reform submitted by Mexico’s President” driving the oil and gas market.
Consider the implications of the “Mexican President Enrique Peña Nieto submitted a highly anticipated constitutional reform proposal to the Mexican Congress for purposes of restructuring the Mexican energy sector, including oil, gas, petrochemical, and power, by allowing greater private participation in the Mexican energy market (the Bill). If approved, the Bill will eliminate some of the most important barriers that have limited the participation of private investment in the Mexican energy sector,” reports the Oil and Gas Financial Journal.
This is reflective of what Russia selling off energy services and solutions to private market creating new millionaires over night. The opportunity for Mexico to privatize energy specifically, oil and gas has its touch points for the overall market.
It is noted that “While ownership of hydrocarbons will remain with the Mexican State, the Bill proposes to open the door for private participation and investment in the upstream exploration and production of oil and gas, as well the midstream and downstream markets.”
The bill is said to remain open to allow for developmental implementation and constitutional reforms to support “secondary laws and regulations once the Bill is approved by the Congress”. These reforms will have deep impact on small business and a possible shortening of the supply chain.
With respect to the oil and gas sector, the main provisions of the Bill are as follows:
- “Allows profit sharing contracts with Mexican and international private companies for the exploration and production of oil and gas or other similar contracts granting exploration and production rights or incentives.
- Allows private investment participation in the midstream and downstream markets, including petrochemicals, refining, transportation, storage, and distribution, through the obtainment of permits, likely to be granted by the Mexican Energy Regulatory Commission or “CRE.””
Energy sector is changing contracts from traditional pay for play to collaborative lease and share promises that place bonds and credit ratings on the line. Stay tune for more information on the development of these collaborations. Further, in shifting from public to private ownership produces the standards on energy security and the implications on shifting.
- Mexico’s Pemex says ammonia gas pipeline leak kills at least three (reuters.com)
- Mexico energy reform ‘could lower business energy prices’ (energylivenews.com)
- THE CRUDE MATRIX: MEXICO – Pemex is the fulcrum to reform of the Mexican energy market (bronzeyegroupcommodities.wordpress.com)
- Economic Outlook: In a Well Timed Shift, Mexican President Embraces FDI in Energy Sector (normativenarratives.com)