A report from Bloomberg Buisinessweek announced that Morgan Stanley plans to invest between $35 million and $110 million in each of Mexico’s top energy companies. The decision comes after the state-owned oil producer Petroleos Mexicanos (Pemex) announced that it will open up the industry to private capital and will boost spending in this sector to record numbers for Mexico.
New York-based bank Morgan Stanley is working closely with Mexico’s former CEO of Pemex,Jesus Reyes Heroles,to determine the best companies for investment. According to Bloomberg,this will include a number of domestic energy companies that need cash and are charged with providing services for Pemex,such as drilling and maintenance.
“We already have a pipeline of potential projects and should be able to announce one or two investments in a couple months,” Reyes Heroles stated. “The large size of Mexico’s private industry in the energy sector is a very well kept secret,and it’s poised to keep growing.”
Based in Mexico City,Pemex is also committed to investing around $269 billion in the state-owned company between now and 2019 in an effort to increase output and boost growth. Oil reform in Mexico real estate back in 2008 allowed foreign and private companies to begin production and exploration projects in Mexico for the first time since 1938,which is expected to increase the output of many of the country’s aging oil fields.
“Other global financial institutions have also expressed interest in ‘piggybacking’ on Morgan Stanley’s Mexican energy capital investments,” shared Reyes Heroles. “We felt those funds,plus Morgan Stanley’s,should be enough to cover our projects for the first two years.”
The goal is to eventually consider the companies for public offering and to shift the focus to include efficiency and new technologies,rather than just price.