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Mexico opens to foreign and private investment as historic oil and gas legislation is signed

12th August 2014

Mexico’s president Enrique Pena Nieto finally signed into law yesterday new legislation allowing foreign and private companies direct access to the nation’s oil and gas natural resources

Mexico open to foreign and private investment as historic energy legislation is signed
The move opens up increased competition and a break from monopolies that have strangled the market for decades

The president commented that the government will inform investors on Wednesday this week which blocks would be going up for sale, with Pemex having exclusive rights to some blocks and the right to offer first bids on some others.

"Today marks a watershed ... a change in the energy paradigm. It is a change in the way we relate our national identity to energy, to bring it up to date with realities of the 21st century," said Pedro Joaquin Coldwell, Mexico’s energy secretary, at the National Palace signing ceremony.

The governments hopes that relevant oversight and regulatory bodies to facilitate the new regulations will be in place by the end of August

These new hydrocarbon laws are a central part of president Nieto's economic reform agenda.

In December, Nieto announced the plans to end the state-owned monopolies of oil company Petroleos Mexicanos (Pemex) and electric company Comision Federal de Electricidad (CFE).

The move opens up increased competition and a break from monopolies that have strangled the market for decades.

The new laws mean that private companies can sign development contracts directly with the government, instead of acting only as subcontractors of Pemex a minimal share in profit.

The nation’s oil and gas output peaked in 2004 at 3.4 million bpd (barrels of oil a day), before declining to its current rate of 2.5 million bpd.

The government hopes that private investment and advanced foreign technologies can boost output to three million bpd by 2018, and back to 3.4 million bpd by 2025.

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