HOUSTON, Texas — Mexican President Enrique Peña Nieto signed a new law reforming the nation’s energy industry. It is expected this new law will bring in billions of dollars in investments to expand oil and natural gas production in Mexico. The move could create opportunity for Texas companies who are already studying the law and the new investment arenas.
In preparation for today’s signing, EGO Mergers and Acquisitions, LLC., an energy related company based in The Woodlands, Texas, hosted a private meeting with members of the Mexican government, Pemex, and Texas energy investors. Breitbart Texas was invited to attend the high profile meeting to see first-hand what this opportunity means for both Mexico and Texas.
“The new reforms creating growth potential for oil, gas, and energy companies in Mexico are now official,” Co-founder of EGO Mergers and Acquisitions, Peter Estevez said. “For businesses in both the United States and Mexico seeking to collaborate and capitalize on new opportunities, this is the ideal time to start making those plans.” Estevez is considered to be a leading expert on Mexican business.
“The opportunity is incredible for businesses who can act quickly, be agile, and get educated quickly,” Estevez continued. The education to seek out is an understanding of the necessary steps required to create synergy between two firms with different cultures and home countries while creating wealth and growth in the community of each.”
The package of bills signed by the Mexican President on Monday is part of an overall reform of the nation of Mexico. Luis Enrique Guerra Garcia, a member of President Peña Nieto’s cabinet told the group of investors and energy leaders who gathered in the Hill Country home of Colonel Lee Roper that his president is reforming the nation based upon five pillars. Those pillars are: Security; Social Improvement to create opportunity for the less fortunate of Mexico; Education Reform; Creating a more prosperous Mexico; and Global Responsibility. The new energy laws are part of the economic development pillar designed to create a more prosperous nation for its people.
Guerra praised the president who he said risked great political capital to push through these reforms that have been ignored by many previous administrations. As for the energy portions of the reform packages, he said the government realizes that they do not have the financial resources to fully develop the energy production potential of Mexico.
Guerra explained that the energy industry opportunities will be categorized in vertical markets. Those being: Deep Water, Shallow Water, Fracking, and Offshore. Between now and mid-September Pemex will evaluate these vertical markets and pick certain segments where they will maintain their current monopoly in production. The remaining vertical markets will then be open to foreign investment. Companies who wish to invest in Mexican energy production will need to partner with a Mexican company which must have at least a 25 percent ownership of the joint-venture.
Production contracts will be regulated and overseen by a newly formed Hydrocarbon National Commission which consists of six commissioners and a chairman. They will govern the investments in Mexico by foreign companies. This is expected to be the most important change in creating economic development in Mexico, according to Guerra.
Pemex Vice President, Luis Manuel Nemer Alvarez, also briefed the meeting and said his company could not continue as it was currently configured. “It is to our mutual benefit that we open our market and share our wealth,” he said. “It is impossible for Pemex to continue to explore and develop our resources without additional investment.” He told the audience that $60 billion is needed to properly develop the potential of these resources.
Breitbart Texas spoke with Nemer after the formal portion of the meeting. He explained this new opportunity could actually create reverse migration where Mexican nationals living in the United States may well return to work and invest in their home country. “This is not just an opportunity for Mexico,” he explained, “it is THE opportunity.” He said this is a must-succeed time for his country.
The meeting was also attended by Republican Texas Railroad Commissioner-nominee, Ryan Sitton. “The Railroad Commission has no formal role in the matter,” Sitton said, “but the privatization of some of Mexico’s oil and gas resources is an exciting opportunity for that country and oil and gas developers in Texas. The free market always does a better job creating economic growth and development than government control.”
“I hope this step creates jobs in Mexico and provides opportunity for the people there,” he concluded. ” And I hope it allows for more production and refining in Texas making America even less dependent on Middle Eastern oil.”
About the meeting, EGO’s President Lisa Roper said, “This legislation is monumental and it provides an opportunity for North America to achieve energy independence and will most certainly change the political landscape on the global stage.”
Co-Founder, Peter Estevez, explained further stating, “The changes will provide numerous opportunities for foreign investment in Mexico. It is not just oil and gas exploration and services, but also countless infrastructure projects that will be needed – pipelines, roads, housing, and more. With our extensive contacts in Mexico within the government, at Pemex, and in the key states where the reserves are located, EGO is strategically placed to guide our clients in these many opportunities.”
One major change that could have crucial impact on the poorest portions of Mexico is how the money from energy resources will be distributed within the government. Luis Nemer explained that previously all of the money went to the federal government and very little, if any, was returned to the states where the energy resources were actually produced. Under the new system, he explained, much more of the money produced from the energy resources will be returned to the states producing the resources.
September 17th is the next date to watch for, as this is when Mexico’s government will announce the allocation of exactly which fields will remain with Pemex and which will become open for investors.
Bob Price is a staff writer and a member of the original Breitbart Texas team. Follow him on Twitter @BobPriceBBTX.