Mexican Oil Rush Is On as Ex-President Fox Gets Black Gold Fever Ben Bain, Adam Williams and Eric Martin - Bloomberg
go to original March 21, 2014

An event to celebrate the anniversary of the expropriation of Mexico's oil industry at the Petroleos Mexicanos petrochemical complex in Cosoleacaque, Veracruz, Mexico, on March 18, 2014. (Susana Gonzalez/Bloomberg)

Mexican companies are racing to be first in line to invest in the country’s energy industry even before lawmakers pass final legislation that would end a 76-year state monopoly.

Alfa SAB (ALFAA), owner of Mexico’s largest petrochemicals producer, sold $1 billion of bonds yesterday to help fund its energy business and refinance debt. State-owned Comision Federal de Electricidad plans to take advantage of the legal changes to sell natural gas, Chief Executive Officer Enrique Ochoa said at the Bloomberg Economic Summit in Mexico City yesterday. Former President Vicente Fox is creating a fund that aims to raise $500 million to invest in the country’s oil and power sector.

Mexican companies are seeking to reap the benefits from a potential surge in new investment as President Enrique Pena Nieto attempts to attract funds and arrest nine straight years of crude production declines with an energy overhaul. While lawmakers have yet to consider rules for putting in place the constitutional changes, Bank of America Corp. estimates the proposed legislation could boost foreign investment by as much as $20 billion a year. Oil production in Mexico may double to 5 million barrels per day, according to Citigroup Inc.

“It seems like an opportune moment,” Fox said at the Bloomberg event. “Many people are already moving based on the real expectations for the secondary laws and what comes next.”

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