(8/27/2013)
SAN ANTONIO – Mexico is moving to end its 75-year state energy monopoly, and companies active in South Texas’ Eagle Ford Shale play may have an advantage in entering that opening market.
Mexican President Enrique Peña Nieto plans to introduce profit-sharing contracts that let foreign companies enter Mexico’s oil-and-gas market.
An open Mexican energy market would appeal to both major and independent energy companies, said Chirag Rathi, a Toronto-based energy analyst for market researcher Frost & Sullivan.
Companies already active in South Texas — such as Chesapeake Energy Corp. — could have an upper hand, and so could U.S. energy firms with Mexican ties, among them San Antonio’s Lewis Energy Group.
Lewis, through a Mexican state-run Pemex contract, became one of the first U.S. firms allowed to produce natural gas south of the Rio Grande. The company spent at least $5 million developing associated pipeline facilities.
Pemex is the world’s fifth-largest crude producer, but its petroleum production plunged 19 percent between 2002 and 2012, according to Frost data. The decline is problematic for Mexico as a whole since Pemex’s taxes fund about a third of the federal budget.
The proposed changes to Pemex could bring in an additional $50 billion in annual investments, said Pemex board member Hector Moriera.
