Why the U.S. could be the big winner of Mexico's energy reforms

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Washington Examiner:

Mexico's Congress approved changes this week to open energy development to foreign firms for the first time since 1938, opening a potential gusher of new investment from United States firms.

 

Mexican President Enrique Peña Nieto has signaled he'll sign the laws, which could attract large companies like ExxonMobil to deepwater projects and smaller, independent ones that have led an oil and gas boom north of the border to Mexico's shale plays.

 

The changes are a win-win for foreign private firms that have wanted to tap into Mexico's potentially lucrative deposits and for the Mexican government, which derives about one-third of its budget from oil and gas revenues but has seen output drop from 3.4 million barrels of oil per day in 2004 to 2.5 million now.

 

Mexican government entities will still reserve the rights to sizable portions of offshore and onshore land for drilling and exploration, but the provisions finalized Wednesday outline ways for foreign companies to enter the market.