Mexican oil future uncertain beyond 2015

Dec. 12, 2013 at 9:07 AM   |   Comments

MEXICO CITY, Dec. 12 (UPI) -- A move in the Mexican Senate to review the privatization of the nation's oil sector could create unease among potential investors, an energy consultant said.

The Mexican Senate approved a measure Tuesday to open the energy sector up to private investors, ending a monopoly for state oil company Petroleos Mexicanos, known also as Pemex.

A measure introduced in the lower house, however, calls for a national vote on the privatization measure in 2015. Jorge Chavez, a former Mexican government official now serving as an energy consultant in Mexico City, told the Wall Street Journal the new referendum adds a layer of uncertainty to Mexico's energy future.

"From here to 2015, are companies going to want to invest?" he was quoted as asking Wednesday.

Mexican President Enrique Pena Nieto outlined his privatization proposal in August to revive the oil and natural gas sector by bringing in more foreign investments.

The U.S. Energy Department's Energy Information Administration reports Mexican oil production declined from 2004 to 2009 because of natural maturation. The Journal reports privatization could lead to the production of 3.4 million barrels of oil per day, a 36 percent increase from current levels.

Mexican lawmakers vote on the measure later this week.

Mexico nationalized the energy sector in the 1930s.

Topics: Jorge Chavez
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