A bill to reform Mexico’s energy sector passed both houses of Mexico’s Congress this week, bringing President Enrique Pena Nieto’s promised overhaul of the state-owned oil and gas industry a big step closer to becoming reality.
The bill would usher in a dramatic opening of Mexico’s oil and gas industry, which was nationalized 75 years ago, and is hoped to revamp the country’s flagging oil production and attract billions of dollars in foreign investment.
Mexico is currently the world’s ninth-largest oil producer and depends on the energy sector for one-third of its revenue, but inefficiency and corruption have plagued Pemex, the state-owned oil monopoly, and Mexico’s oil production has dropped by about a fourth over the past decade. At a time of high oil prices, this has meant foregone revenue and expensive imports, which have helped drag down GDP growth to a rate of 1.3 percent in 2013.