This must be part of the implementation of the North American Union.
HOUSTON, Texas — Earlier this week Mexican President Enrique Pena Nieto signed new rules into law, which allow private companies to access state-run oil fields.
Nieto said that certain oil fields will be kept for the use of Petroleos Mexicanos (also known as Pemex), according to the Associated Press (AP). The sections that will be available to private and foreign companies will be revealed soon. The president reportedly hopes to have regulations in place to put the new rules into motion within the next few weeks.
“With this reform we can extract oil from deep waters and take better advantage of our vast deposits of shale gas, to generate electricity at lower prices,” the Mexican president reportedly said of the changes.
Nieto’s announcement can easily be deemed historic, given that the federal government has controlled the gas and oil industry in Mexico since 1938.
Energy Secretary Pedro Joaquin Coldwell said of the new rules, “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.”
Nieto’s motives for signing the new rules into law appear to be related to profitability. Government-run gas and oil has been the cause of steep power prices in Mexico. The country has been forced to import a significant amount of gas, as the government was not able to produce it efficiently. The AP reported that Nieto said the new rules will result in lower electricity prices and more jobs for Mexicans.
The federally-controlled industry also caused “a constant decline in oil and gas production in recent years, as Pemex proved unable to open up significant deep-water or shale-gas production, both areas where the government hopes private firms will bring in expertise and tens of billions in investment,” the AP reported. “The reforms open up production- and profit-sharing contracts for private companies that had been restricted to operating just as subcontractors for Pemex, without the ability to book reserves or gain a significant share in profits.”
Mexico’s gas and oil production has been decreasing at a significant rate since 2004; the country currently produces only 2.5 barrels per day.
This amount is dwarfed by oil production in the U.S. Texas alone is currently producing 3 million barrels of oil each day. As long as Texas’ oil industry is left largely unregulated, the state is expected to outproduce most OPEC nations in the near future.
Follow Kristin Tate on Twitter @KristinBTate.