Mexico Proposing To Lift Oil Industry Ban

Mexican President Enrique Pena Nieto proposed on Monday lifting a decades-old ban on private companies investing in the state-run oil industry, a cornerstone of Mexico’s national pride that’s seen production plummet in recent decades.

The reform would allow profit-sharing contracts with private companies that have exploration know-how in deep water and other difficult areas that the state-owned oil company, Pemex, doesn’t have. Such contracts are currently prohibited by the constitution, which would have to be changed.

The leftist Democratic Revolution Party says it won’t support constitutional changes, but Pena Nieto’s Institutional Revolutionary Party and the conservative National Action Party have enough votes combined to secure the two-thirds majority needed in the Senate to pass the change. They could do the same with the support of a small, allied party in the Chamber of Deputies.

The measure then would have to be approved by at least 17 of the country’s 32 state legislatures.

“Mexicans will remain the sole beneficiaries of the country’s oil profits,” Pena Nieto said as he presented his proposal. “It’s time to use all of our energy resources to move forward and transform Mexico.”


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu