Mexico’s Senate approved a new energy reform bill on Wednesday that will open the country’s oil and gas industry to private and foreign investment through production sharing agreements and licensing.
President Enrique Pena Nieto’s ruling PRI and opposition party PAN presented a united front against Mexican leftist party PRD, passing the energy reform bill by a vote of 95 to 28 in the Mexican Senate on Wednesday. The lower chamber of Mexico’s Congress, the Chamber of Deputies, followed suit voting 353 to 134 in favor of the reform.
Pena Nieto said the victory was the product of three months of labor, with long hours and intense debates. “The number, depth and significance of the reforms approved by Congress in one year is really encouraging and reflects the modernizing spirit that now lives in the country,” the Mexican president said in a statement on his website.
The last crucial step in making the energy reform a reality is to change the constitution, which will require the approval of 17 of Mexico’s 31 states.
Mexico’s current total production is hovering at 2.2 million b/d, said Sergio Guaso, Vice President for Business Development, Pemex E&P at LAGCOE this October. Approximately 70% of PEMEX’s total production comes from Mexico’s offshore. The crown jewel in Pemex’s offshore production is its oldest field, Cantarell, which currently produces 388,000 b/d, a steady decline from the 2.2 million b/d production peak achieved in 2004.
In addition to developing new production and technology partnerships, the energy reform could be a game changer for Mexican shale, which Guaso said accounts for zero of Mexico’s production today.
Read past coverage on Mexico's energy reform: