Mexican energy law: industry renaissance or chronicle of a death foretold

gonzalez-canale, eduardo;

The energy industry has been Mexico�s main economic engine since the early 20th
century. Booming oilfields across the Gulf of Mexico have financed government expenditures, social programmes and infrastructure for almost 80 years. Nevertheless, Mexico�s once abundant reserves have been dwindling at an accelerated rate under the energy monopoly model controlled by the state. As exploration, production, processing and distribution became increasingly complex and demanded higher levels of specialization, the Mexican energy industry started to lag and fall behind due to the State�s monopoly inability to efficiently reallocate and invest the necessary resources to maintain a sustainable growth. Consequently, the once almighty Mexican oil production peaked in 2004. In 2013, the Mexican government was finally able to enact the necessary constitutional and legal changes to transform the energy industry from a monopoly into a free market model where private companies, domestic and international, could invest and participate in Mexico�s energy renaissance. This article will discuss the new model, focusing on upstream ventures, brought about by the Energy Reform, including the main regulatory agencies, laws, and contract schemes that are expected to attract new investors and technologies, ultimately reinvigorating Mexico�s energy industry.