Oil Services Sector to Benefit from Mexico Energy Reform
Barclays reported that reform could boost oil and gas investment in Mexico by approximately $13 billion a year, reaching an average investment of 3.2 percent of gross domestic product in the 2014-2030 timeframe and adding 1.2 percent to potential expansion of Mexico’s economy.
The lack of investment and new technologies in Mexico resulted in a decline in PEMEX’s crude oil production from just over 3 million barrels of oil per day (bopd) in 2007 to an estimated 2.5 million bopd, significantly lower than the 3.4 million bopd that PEMEX produced in 2003-2004, Wood told attendees at the 8th Annual Mayer Brown Global Energy Conference in Houston.
Despite abundant shale gas and other gas resources, Mexico is a net importer of natural gas. The United States is exporting growing amounts of gas to Mexico in response to the country’s growing supply gap. Energy reform proposals will put the country a step closer to boosting domestic gas production.
“A successful reform could limit Mexico’s needs for U.S. gas in the longer run, but at present we reiterate our projections for U.S. natural gas exports to Mexico to grow in the next 3 to 5 years,” according to a Aug. 16 Barclays report.
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