President Enrique Peña Nieto announces Energy Reform Initiative
President Enrique Peña Nieto sent the Energy Reform Initiative to the Senate as part of sweeping reforms planned for the energy sector yesterday. The president has had to tread carefully because there is widespread support for Pemex, the 75 year old state owned oil company which has brought so much wealth to Mexico. The situation is so sensitive that in the president’s press release on his website the words “PEMEX not sold or privatized. PEMEX is strengthened and modernized” has been printed in larger headline lettering.
Pemex, the eighth largest oil company in the world has failed to keep up with technological changes and is struggling to match modern needs to drill deeper and smarter to obtain oil in deep waters off the Mexican coast as well as tapping into large shale oil fields. The move by the president will allow risk and profit-sharing partnerships between foreign firms and Pemex which should bring in the technology to enable the company to compete.
The details of the reform (in Spanish) can be found here.
The president in his official release says that:
“This day I have sent the Energy Reform Initiative to the Senate.
This reform represents one of the greatest opportunities for Mexico in recent years. If we seize this opportunity it will create hundreds of thousands of new jobs and better wages.
If we carry out this reform it will lower the price of electricity and gas; also lower the price of fertilizers and consequently, our fields will produce more, there will be more food and better prices”.