This past December, Mexico passed a historic energy reform that has the potential to fundamentally transform the country’s oil, gas, and electricity sectors. In this brief that I co-authored with James Taylor, founding partner at Vianovo, we lay out the importance of the soon-to-be-announced secondary legislation, provide an outline of the newly formed regulatory regime, and explore the types of opportunities that the reform will create.
Mexico is the world’s 9th largest producer of oil and the third-largest in the Western Hemisphere (behind the United States and Canada and ahead of Venezuela). It has vast untapped shale oil reserves, estimated to be the 5th largest in the world, according to the U.S. Energy Information Administration.
As the third largest supplier of crude oil to the United States (after Canada and Saudi Arabia), Mexico accounts for roughly 12 percent of its northern neighbor’s total imports. The lion’s share of Mexico’s crude oil exports (85 percent) head to the United States—all supplied via tanker, as Mexico does not have international oil pipeline connections.