Oil companies from Exxon Mobil Corp. (XOM) to Chevron Corp. (CVX) will have to wait another two years before investing an estimated $20 billion in Mexico’s recently opened oil and gas industry.
Foreign crude producers will be allowed to bid on fields for exploration and begin developing infrastructure and operations as soon as late next year, Deputy Energy Minister Enrique Ochoa said in an interview at the ministry in Mexico City. Prior to granting the operating licenses, the legal framework has to be determined and state oil producer Petroleos Mexicanos must select the fields it plans to continue to develop, he said.
“We estimate that by the end of 2015 or beginning of 2016, we could be in the stage of implementation,” Ochoa said. “We must be professional and careful with the necessary institutional development prior to the following rounds.”
President Enrique Pena Nieto ended the 75-year production monopoly held by Pemex, as the state oil company is known, allowing foreign companies to produce crude in the largest supplier to the U.S. after Canadaand Saudi Arabia. The overhaul could bring an additional $20 billion foreign direct investment as soon as 2015, according to Bank of America Corp.
Ochoa’s forecast lags behind the prediction of Victor Herrera, Standard and Poor’s Latin American Managing Director, who said pipeline and shale gas investment could be seen “very quickly” in a Dec. 20 interview. Herrera said Mexico could see economic growth from the reform as soon as the second half of 2014.
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