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Mexico Tentatively Welcomes Foreign Energy Investment

PEMEX logoMexican President Enrique Peña Nieto has unveiled a plan to permit some limited participation by other oil companies in the country, marking the first time in 75 years that state-owned Pemex won’t be the only game in town.

Mexico’s oil industry has been nationalized since 1938. The country is the third largest supplier of oil to the US and has the world’s fourth largest reserves of shale gas, according to Forbes.

The reform may revolutionize the energy sector in Mexico and open the door to oil giants such as Exxon, BP, Shell and Chevron.

Nieto’s proposal must receive congressional approval but is moderate enough that it’s likely to pass. It won’t give foreign oil companies outright ownership of oil fields but will give them payment for oil they find and produce, reports Forbes.

Nieto made it clear that Pemex will not be sold or privatized and that his plan is meant to garner private investment to stimulate the country’s energy sector. Pemex funds about 30 percent of Mexico’s national budget and is a source of pride for many Mexicans, according to the Washington Post.

Although Mexicans see Pemex as “drenched in corruption,” according to the Washington Post, at the same time, Mexicans consider their oil reserves a national treasure not to enrich foreign companies.

Some criticized Nieto’s proposal because it doesn’t address the endemic problem of corruption within Pemex. The Forbes article suggests Nieto cannot address the problem of corruption because too many members of his own party, PRI, participate in the graft.

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One thought on “Mexico Tentatively Welcomes Foreign Energy Investment

  1. Daaaa. Will the U.S. tax payers be on the hook for this very old scam, again?
    Yes, Mex nationalized its oil fields, that U.S. oil companies found and built, in 1938. Those fields are just about exhausted due to no maintenance and excessive pumping, to support the Mex Oligarchy. Boo Hoo.
    OPEC got their fields exactly the same way. They will need help shortly too.
    Russia pulled the exact same trick a few years ago.
    Guess who pays for the stolen fields & investments. U.S. tax payers, both in the investment, and later on when we have to support terrorism with inflated oil rates, because our fearless leaders faked an oil spill back in the mid ’60s, in order to outlaw U.S. off shore drilling.
    Besides, haven’t we contributed enough to the Mex Oligarchy? Billions in foreign aid. Clinton gave them $40B & got back a little over $4B. Don’t forget the Fast & Furious gun running operation where we helped give guns to the Mex drug cartels.
    Mex can HIRE someone to fix their stolen wells & infrastructure.
    When do we get the guns back?

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