US Energy Companies Poised to Benefit from Mexico Energy Reform



Like the United States, Mexico is experiencing a shortage of engineers in certain age groups. The nation will need to invest in the training of more engineers to make up for the shortage of engineers with 10 to 15 and 15 to 20 years of experience, Stewart noted. PEMEX and other companies have told NES that they have already started to invest in training programs to develop local content.

In terms of infrastructure, an exact date is unknown as to when demand for workers and services to set up onshore shale operations will pick up. However, this demand spike could occur next year, as PEMEX has until the end of 2014 to select fields. Private, foreign companies interested in investing in Mexico’s energy sector will face challenges in security and infrastructure. Companies operating in northern Mexico will need to be mindful of security not only for their workers, but for vandalism of infrastructure such as pipelines, Stewart noted. Private foreign companies will also have to contend with local content requirements, with an expected push for hiring Mexican citizens and for Mexican workers returning from overseas jobs to their native country.

If project life-cycle is considered, Mexico could see demand increase for workers from the pre-front-end engineering and design stage through commissioning, which would include roles such as project controls, design, health safety and environment, construction and commissioning, Stewart said.

Spillover to Mexican households in the form of lower energy prices and more jobs will greatly benefit both Mexico and the United States. According to the Mexican government, the reform could create 2.5 million jobs by 2025 while BBVA Research estimates that Mexico’s long-term GDP could increase by 1 to 1.5 percent as a result of the reform. More jobs in Mexico will also translate into higher demand for U.S. goods and services and further reduce incentives to immigrate to the United States.

From a regional perspective, the benefits could also be significant considering the multiplier effect of energy investments. Some studies suggest that in the United States, one job created in the unconventional oil and gas industry supports four more indirect and induced jobs, BBVA Compass noted.


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