The move this week by the Mexican government to begin to de-nationalize Mexico’s state oil industry is seen as a development that has the potential to remake Mexico’s economy, improve strained relations between Mexico and the United states, cut illegal immigration, cripple Mexico’s violent drug cartels, and bring North America closer to energy independence, 1200 WOAI news reports.
The Institutional Revolutionary Party of President Enrique Pena Nieto this week presented a 295 page bill to Mexico’s Congress which would, for the first time since the forerunner of the PRI nationalized Mexico’s oil reserves following the revolution of the 1920s, open Mexico’s vast oil reserves for exploration and extraction by U.S. oil companies.
“This would be another element in that whole strategy that we have, to become less dependent on Middle Eastern oil,” said Gilbert Vasquez, a partner at the San Antonio law firm of Strasburger and Price LLP, and an expert on international energy law.
He says the de-nationalization of Petroleos Mexicanos, which for 80 years has been the only firm allowed to explore, drill, or market petroleum products in Mexico, could be the most significant development in Mexico’s post revolutionary history.
“It allows for U.S. technology and other foreign company’s technology to be brought into Mexico, something Pemex, the monopoly that regulates oil production in Mexico has been unable to do,” he said.
Indeed, Pemex has been unable to keep up with new types of technologies which are being used successfully in the United States to mine so called ‘tight oil,’ especially the vast amounts of oil and gas locked in shale fields in places like the Eagle Ford in south Texas.
“I would liken it to having the border all of a sudden erased between what is going on currently in the Eagle Ford Shale in South Texas and northern Mexico,” Vasquez said. “The Eagle Ford Shale continues into Mexico.”
Vasquez and other experts say this move is in line with President Enrique Pena Nieto’s effort to defang the violent drug cartels which have controlled much of northern Mexico since 2005 by ‘re-industrializing’ the region, to provide good jobs to local residents, so they don’t have to either emigrate illegally into the United States, or become cannon fodder for drug gangs.
Mexico’s Congress is expected to approve the reforms before adjourning for it’s Christmas vacation.
Vasquez says there will be discontent, mainly among Mexico’s labor unions concerns about changes to cushy jobs in the government oil monopoly, and from reactionaries who continue to feel that government control of natural resources is their nation’s ‘patrimony.’
But the PRI and the chief rival party, the business-oriented National Action Party, both support the proposal, and they together control the two thirds majorities in Mexico’s Congress needed to approve the measure.
But the measure does contain language stressing that the oil and gas under Mexico’s soil still belongs to the Mexican government, and the proposal expressly forbids allowing foreign oil companies from ‘claiming’ reserves of Mexican oil on their financial statements, two aspects that observers say may slow the expected rush of major U.S. companies into Mexico.
But the measure will allow U.S. expertise in areas like hydraulic fracking to immediately begin work in Mexico, leading to a boom in the Mexican economy.