EIA: Mexican Oil, Gas Production to See 'Profound' Increase

The country’s oil and natural gas production could rise by as much as 75 percent compared to EIA’s assessment last year – a result of new legislation signed into law Aug. 11 that opens Mexico’s energy market to direct foreign investment.
Source:usnews     Time:26 Aug 2014

The country’s oil and natural gas production could rise by as much as 75 percent compared to EIA’s assessment last year – a result of new legislation signed into law Aug. 11 that opens Mexico’s energy market to direct foreign investment.

“The changes in EIA’s assessment of Mexico’s liquids production profile are profound,” the agency said in a report Monday. “Although there are many complexities to the new reform and many details that still must be settled before the reforms can take effect, reform is expected to improve the long-term outlook for growth in Mexico's petroleum and other liquids production.”

Previously. foreign companies have been forced to partner with state-owned petroleum company Petroleos Mexicanos, or Pemex, in Mexico. The new law signed by President Enrique Pena Nieto, however, introduces profit- and production-sharing contracts for foreign companies, as well as licenses that allow companies to be paid with the oil and gas that’s extracted in mining projects.

“Licenses will likely be used for projects that are very capital intensive and high-risk, requiring advanced technology, like oil shale or ultra-deepwater projects,” EIA explained. “Less risky onshore and shallow offshore projects would more likely use profit-sharing arrangements.”

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