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Mexico: President Pena Nieto reveals plans to crack oil monopoly

By  |  August 13, 2013
Mexico: President Pena Nieto reveals plans to crack oil monopoly

Plans to overhaul Mexico’s oil industry, largely controlled by its 75-year-old monopoly Petroleos Mexicanos, were unveiled by President Enrique Pena Nieto Monday, but the proposals have received mixed responses. The bill, presented to Congress, intends to crack the monopoly through the introduction of private competition. Companies like Exxon Mobile Corp. and Chevron Corp. have expressed interest in becoming the nation’s first private companies to pump crude oil since 1938. Reports say the proposal, which also offers companies a portion of profit in a business model also allowing the firms to book reserves under US Securities and Exchange Commission policy, would be the most drastic economic overhaul since the North American Free Trade Agreement in 1994. But in response to the offer, some expressed skepticism that the legislation would yield the intended consequences. Scotiabank’s emerging-market strategy head Joe Kogan told reporters that the bill “seems a little underwhelming” and questioned whether the proposal would, in fact, maximize oil production.

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