Mexico's President Courts Big Oil With End to State Monopoly
Peña Nieto’s plan to open up to foreigners faces domestic hurdles
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Petróleos Mexicanos, or Pemex as it’s known, is a laggard among state oil companies. Production from the huge offshore Cantarell field has been declining steadily. The Mexicans know there is plenty more gas and oil to be had, but Pemex lacks the in-house expertise and capital to drill in deep Gulf of Mexico waters or extract oil through hydraulic fracturing on land. The oil majors have little incentive to help, since they were kicked out 75 years ago.
Then on Aug. 12, Mexican President Enrique Peña Nieto announced that Pemex would allow outside companies to drill in Mexico—provided he can amend the constitution, which bans outsiders from the industry.