Mexico Energy Bill Close to Final Approval

Mexico’s Senate has approved a measure to open the state-run oil fields to foreign investment for the first time in 75 years.

The measure would let private firms explore and extract oil and gas with state-run firm Pemex, and take a share of the profits.

It now moves to the lower house to be voted on, where it is expected to pass.

President Enrique Pena Nieto wrote on Twitter that it was “a significant decision for Mexico”.

Mr Pena Nieto said it was necessary to modernise Mexico’s energy sector and increase oil production, which has dropped from 3.4 million barrels per day in 2004 to the current rate of 2.5 million barrels per day.

However, the left-wing Democratic Revolution Party said it was a submission to US oil companies, and protesters set up camp outside the Senate.

They say the move strikes at the heart of Mexico’s identity.

In 1938, then-president Lazaro Cardenas nationalised the oil industry, which had been operated by foreigners up to that point, asserting that Mexico had a right to its mineral wealth.

If the measure passes Mexico’s Congress, it must then be approved by 17 of the country’s 32 federal entities.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza