Mexico’s energy reform
Upstream: Opportunities and challenges of Mexico's energy reform secondary laws
Mexico has significant oil and gas reserves, yet in the past few years its oil production has declined 25 percent to 2.5 million barrels per day (bbl/d) from a peak of 3.3 million bbl/d in 2004. In December 2013, after years of contentious deliberations, the Mexican Government amended the Constitution, opening the oil and gas market to private foreign and local investors for the first time since 1938. In August 2014, the Mexican congress approved secondary laws that clarify the steps needed to transition opportunities to reality.
During the past 18 months, the Mexican Government has demonstrated a deep commitment to transforming its energy industry. Many questions still must be answered, but Mexico has been faster in implementing its reforms than at any time since the industry was nationalized in 1938. As a final point, the precipitous drop in oil prices will clearly have an effect on the success of this reform in the short term. The drop is an opportunity for all parties to reaffirm their commitments to change, make course corrections, and move forward.