Challenges Loom Despite 'Vast Opportunities' for Mexican Oil Jennifer Booton - FOXBusiness
go to original April 14, 2014

As Mexico works to denationalize its oil and gas market after seven decades, billions of dollars of potential profits and opportunity are waiting to be scooped up.

However, swaths of people - mostly in Mexico - still oppose the change, and faced with cost and political challenges, the reform could take years to materialize.

Many fear foreign direct investment will siphon money away from crucial middle-class programs and incite violence among gangs such as the Zetas heavily involved in the country’s oil and gas black market.

Others fear contracts won’t be negotiated properly, and that communities won't benefit since the government – not the landowner - owns undiscovered reserves.

At the same time, the oil sector operated for close to 80 years as a national treasure; completely at the control of the Mexican government with state-owned Pemex operating a monopoly since 1938. In fact, March 18 - the day the oil industry was nationalized that year - has been celebrated as a national holiday for generations.

Pemex provides some 30% of the revenues of Mexico’s federal government. Relinquishing that control has some Mexicans on edge, and there have been mass protests tens of thousands of people strong in the capital Mexico City fighting the reform.

Read the rest at FOXBusiness

Photo: Reuters

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