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Monday, March 20, 2017

'Energy Reform Marks Watershed' for Mexico

Office of the Mexican Presidency

“It’s time to go forward. To take advantage of the enormous opportunity that has arisen so that together, we can write a new and better stage in the energy history of our country”: Mexican President Enrique Peña Nieto (EPN)

President Enrique Peña Nieto led the ceremony of the 79th Anniversary of Oil Expropriation.

Petroleos Mexicanos (Pemex) is the country’s most emblematic firm and an important part of its identity.

Its achievements include having developed the Cantarell complex, the second largest deposit ever found worldwide; which put Mexico’s name on the map in the 1970s; and turned Mexico into a major oil exporter.

In 2004, Cantarell produced more than 2.1 million barrels of crude, accounting for 60% of the country’s total production.

However, the resources of this deposit were gradually depleted.

This halted the development of Pemex and Mexico. Today, Cantarell produces only 200,000 barrels a day, equivalent to 10% of national production”. EPN

In this context, the Federal Government was forced to choose between two alternatives:

First, continue along the same path, which involved producing less and less oil and threatening the jobs of thousands of workers, public finances and the country's energy security.

“Or resolutely embarking on the path of transformation. And this was precisely what Mexicans decided”. EPN

Mexico needs partners to implement state of the art technology and follow best international practices; share costs and risks and combine efforts and resources.

“Mexico therefore needed to deal decisively with the energy challenges of the twenty-first century, as our country did 79 years ago with oil expropriation”: EPN

Achievements of Energy Reform:

  • The modernization of industry
  • The creation of high-quality jobs
  • Increased revenue for the state
  • Economic growth.

In the two and a half years since the secondary laws of the reform were passed, there have already been concrete results:

“Today we can say that August 2014 marked the start of an energy revolution in our country.” EPN

      • Two and a half years ago, there was only one oil drilling and exploration company in Mexico; today, there are 48 national and international companies participating.

      • Two and a half years ago, there was no competition in natural gas transportation and marketing. Today, 24 companies are investing in these activities.

     • Two and a half years ago, Pemex had a limited budget, based on public resources, and forced to assume all the risks of oil activities. Today, we have a productive state enterprise, capable of forming partnerships, which make it possible to reduce risks, acquire new technologies and increase their funding sources.

     • Two and a half years ago, there were very few resources for investing in energy development. Today, as a result of the Reform, investments of approximately US$70 billion have been pledged.

“Thus, Energy Reform is opening new possibilities to the private sector but, above all, it is opening up opportunities for the expansion and modernization of Pemex.” EPN

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Presidency of the Republic Blog, Mar. 18, 2017, Mexico, DF; translation by Presidency of the Republic

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