On August 11, Enrique Peña Nieto, the President of Mexico signed a energy reform law which could be considered as a milestone in history, ending officially the monopoly of oil and gas production and power sector having been lasted for 75 years. The law will allow foreign and private enterprise enter into oil and gas production and power sector. The new law will be used as rulebook for overall energy reform. Energy reform aims to attract billions dollars investment to struggling oil and gas production and power sector in Mexico.
The President, Enrique stated that the government would publish the region of oil and gas sources where foreign and private enterprises were allowed to exploit. PEMEX (Petroleos Mexicanos) has priority of exploitation in some regions. Enrique also promises to set out specific administrative rules and definite regulator to carry out new law before the end of August.
Since oil and gas industry being nationalized in 1938, PEMEX and CFE are always monopolizing the nationwide oil and gas production and power supply. PEMEX hires other foreign corporations to exploit oil and provide drilling or other services. However, the pattern has already caused Mexican oil output to drop sharply in recent years.
Mexico is the third largest oil supplier for the U.S.and the Mexican shale gas reserves are located at the forth position in the world. In 2004, yield of oil and gas in Mexico reached 3.4 millions barrels per day which was the highest level in history while the yield drops 2.5 million barrels per day at present. With the help of the energy reform law, Mexican government hopes that yield of oil and gas will recover to daily 3 million barrels in 2018 and increasing daily 3.5 millions barrels a new high level in 2025.