MEXICO CITY – Mexico’s energy sector will offer major business opportunities in 2018 for both domestic and international oil and gas companies, the head of an industry association said.
“The attractiveness of the country’s energy sector has been seen in the volume of foreign investment and the confirmation that insecurity and corruption are not mitigating business development,” Ricardo Ortega, director general of the Mexico City-based Oil & Gas Alliance, told EFE.
Ortega shrugged off concerns related to presidential elections in July and the ongoing renegotiation of the North American Free Trade Agreement (NAFTA), which links Mexico, the United States and Canada, saying there were no political or geophysical barriers to prevent companies from operating fully in Mexico’s energy sector.
With respect to Mexico’s electoral process, Ortega said the Oil & Gas Alliance had no preference among the different presidential candidates and was prepared to work with whomever is elected.
He ruled out the possibility that a victory by leftist frontrunner Andres Manuel Lopez Obrador would bring a halt to the energy sector overhaul or the execution of contracts that have already been signed, saying the process set in motion by the 2013 reform was irreversible.
Lopez Obrador was a harsh critic of the overhaul when it was approved, although he has softened his stance in recent months.
Referring to the delayed fourth oil and gas auction of the Round 2 series, to be held on Jan. 31, he said the blocks on offer would include a very important area of the Perdido Fold Belt (near the US-Mexico maritime border), the Cordilleras Mexicanas (a basin off the Gulf coast state of Veracruz) and the pre-salt Salina Basin (off the state of Veracruz and Tabasco in the southern Gulf of Mexico).
“The states of Tabasco and Veracruz have a great need to develop their oil areas, and that goes above and beyond the political issue,” Ortega said, adding that the Oil & Gas Alliance’s biggest concern is that business opportunities are on offer in that part of the country.
President Enrique Peña Nieto’s administration pushed through an energy sector overhaul in 2013 that ended state oil company Pemex’s decades-old exploration and production monopoly.
The goal was to attract tens of billions of dollars in investment and reverse a sharp decline in Mexico’s oil output, which peaked at 3.38 million barrels per day (bpd) in 2004 and currently stands at around 2 million bpd.
Peña Nieto said in March of last year that private companies had committed to invest a total of $70 billion in the wake of the overhaul.
He said then that foreign companies such as BHP Billiton, Exxon Mobil Corp., Chevron Corp. and China’s state-run China National Offshore Oil Corp., all of which won rights to invest in Mexican offshore fields in a deepwater oil and gas auction in December 2016, had made their decisions despite global uncertainty and volatility.