Oil industry closely watching Mexican energy reform

Oil company executives are anxiously watching the Mexican government’s implementation of its energy reform to see if it will help them.

The end of 76 years of government monopoly over Mexico’s oil and electricity industries could open massive new possibilities for international oil companies, but they’re being cautious, The Wall Street Journal reported.

ADVERTISEMENT

“Time will tell,” Charles Davidson, chief executive office of Noble Energy, said at a meeting of oil leaders in Mexico. “We’re tiptoeing into it.”

Sami Iskander, chief operating officer of BG Group, said the potential is huge for oil companies in Mexico, according to the Journal.

Under laws finalized last month, Mexico will start in February to auction off rights to drill in 169 offshore and onshore areas.

The country’s goal is to increase oil production by 500,000 to 2.8 million barrels per day before 2018. State-owned monopoly holder Pemex produces about 2.3 million barrels a day, down 1 million from 10 years ago.

“It's exciting and it's early days,” Andy Hopwood, an executive with BP, told the Journal