The fate of proposals to reform the Mexican oil and gas industry, now being considered by the country’s lawmakers, matters well beyond Mexico itself. The outcome could reshape the energy sector in a number of important countries.
For Mexicans, the nationalisation of oil and gas resources in 1938 was a mark of independence and freedom from manipulation by oil companies. The event marked the start of a resistance movement that challenged the existing rules of the game — first in Iran, then across the group of countries that became Opec, the oil producers’ cartel. The action helped define the resource nationalism of much of Latin America. Pemex, the company that took over the expropriated assets of the international companies, was a model for the national oil groups created around the world.
The proposed modification of articles 27 and 28 of the Mexican constitution to allow international companies to work openly as partners in all parts of the business, from exploration to refining, is therefore a symbol of modernisation under President Enrique Peña Nieto. If the reforms receive the required two-thirds majority — and, more importantly, if they prove to be successful in improving performance — they will open the door to change across the economy. A country that, on the basis of its resource base and geographic position, should be rich has allowed itself to sink under the weight of bureaucracy. Pemex’s inefficiency is legendary and its performance as an explorer and producer is woeful. The result is a country that is poorer and more socially divided than it need be. International companies can bring not just technology and skills but also higher standards of environmental care and ethical behaviour.