Mexican President Enrique Peña Nieto predicted big production gains in the oil and gas sector beginning in 2018 as a result of energy reforms its congress passed this month.
Peña Nieto said changes to allow foreign companies to participate in energy development for the first time since 1938 would have significant effects on Mexican output. Oil production would rise to 3 million barrels per day, up from 2.5 million, and natural gas would hit 8 billion cubic feet per day instead of the current 5.7 billion cubic feet, he said.
"It creates opportunities for private companies to invest, and improve and expand the sector’s infrastructure," he wrote in an editorial for the Financial Times, adding that state-owned oil company Pemex "will be more competitive and will have the autonomy needed to operate as a modern company, as well as the opportunity to forge alliances and reduce operating costs."
U.S. companies could be some of the bigger beneficiaries from the opening up of the world's 10th-largest oil producer.
That's because Pemex lacks the capital to tap into lucrative deepwater deposits — "majors" like ExxonMobil will likely perform that work. The nation is also trying to unlock its shale gas reserves, which Peña Nieto said rank sixth in the world, and will likely draw on U.S. businesses that pioneered the hydraulic fracturing, or fracking, revolution to do so.
Peña Nieto said the new energy framework, in which Mexican government entities like cash-strapped Pemex would have the ability to strike joint ventures with foreign companies, would boost Mexican gross domestic product 1 percent by 2018 and 2 percent by 2025.
"Our goal is to make Mexico more open, productive and competitive, with sound public finances and skilled human resources; so we can play a more active role in the global economy and provide our people with a better quality of life," Peña Nieto said.