CNBC reported this week that Mexico’s incoming president Enrique Pena Nieto has an agenda that is expected to positively transform the country’s energy sector, labor laws and tax base. Pena Nieto will take office Dec 1 and has promised to push for additional private sector involvement in Petroleos Mexicanos, or Pemex, which is the nation’s state-owned oil and gas monopoly.
According to CNBC, the reforms would open Pemex to private sector investment and the company could even be listed as a publicly traded stock at some point in the future. This is predicted to be excellent news for U.S. investors, who will enjoy access to investing in Mexico’s growing energy sector through new investment vehicles that are already in development by US investment firms such as Morgan Stanley and Goldman Sachs.
“If he succeeds,i t would have huge beneficial effects for Mexico’s economy,” Shannon O’Neil, senior fellow for Latin American studies at the Council on Foreign Relations, told CNBC. “The most obvious is an increase in foreign direct investment in the energy sector itself. But the benefits would spread to infrastructure more broadly, to services, and would lower the energy costs for companies in general – improving competitiveness.”
Oilfield services companies such as Houston-based firms McDermott International,Baker Hughes, Halliburton and Schlumberger, as well as San Ramon’s Chevron, have already been awarded Pemex contracts. This trend is expected to continue under the new president’s guidance over the coming months.
As deregulation increases,New York investment firm Morgan Stanley Private Equity plans to invest between $35 and $110 million in each of the top energy companies in Mexico real estate. In June of 2012, Morgan Stanley predicted that several of Pena Nieto’s planned initiatives would produce “significant business development and investment opportunities.”