Arab Today, arab today foreign oil firms brace for mexico comeback
Last Updated : GMT 05:10:13
Arab Today, arab today
Arab Today, arab today

Foreign oil firms brace for Mexico comeback

Arab Today, arab today

Arab Today, arab today Foreign oil firms brace for Mexico comeback

View of a tank with processed oil at Mexican state
Mexico City - AFP

 Foreign energy firms have wanted to return to Mexico since they were kicked out 76 years ago. Now that they have been invited back in, they are cautiously preparing their comeback.
Well before Mexico's Congress voted Wednesday to implement historic reform reopening the state-controlled sector to private investors, foreign companies followed every step of the legislation, hired lawyers and consulted tax experts.
President Enrique Pena Nieto must now sign the centerpiece of his reform drive, which will break the monopoly held by state company Pemex since then president Lazaro Cardenas nationalized the sector in 1938.
The Congress had approved constitutional changes to the country's energy laws in December, but investors were waiting for lawmakers to pass the final legislation that outlines the legal nuts and bolts.
While the reform says foreign firms can sign profit- and production-sharing contracts, they will only see the fine print when the first auctions open next year, experts say.
Other concerns for investors include navigating Mexico's notoriously corrupt institutions as well as drug cartel violence in the oil- and gas-rich north.
"There are a lot of attorneys who have lots of work right now," Pete Garcia, executive director of the Gulf Coast chapter of the United States-Mexico Chamber of Commerce in south Texas, told AFP.
"Before people start to invest millions of dollars they want to make sure they understand all the legalities," said Garcia, whose organization represents 100 firms in America's energy hub, including oil giant ExxonMobil.
"We cannot yet run with the ball because we are still taking baby steps here. We still don't have 'project one' yet," he said.
- High taxes and corruption -
The chamber of commerce has recently entered a "strategic alliance" with Pemex's procurement office in Houston to help US companies through the process.
Several companies are also making sure their employees are familiar with US foreign corruption laws because "nobody wants to go to jail over trying to win a bid and not doing it the right way," Garcia said.
In Mexico City, local executives from ExxonMobil and British rival BP head an "energy task force" to monitor developments in the sector for the American Chamber of Commerce of Mexico.
The two companies declined to comment.
But before bidding for contracts to drill for shale gas or deep-water oil, companies will weigh the risks, benefits and tax burden, said David Shields, a Mexico City-based author of books on Pemex.
"It's obvious that the big international companies are interested in coming, but they want to see more," he said.
The government will also have to reassure companies that the process will be "clean" and free of corruption, he said.
Raymundo Tenorio, economics director at the Monterrey Technological Institute, said high taxes may temper some of the excitement at first.
"The tax burden will initially discourage private initiatives to arrive in the way that we expect," Tenorio said. "It's a brutal tax burden that will gradually come down."
- 'Eat you alive' -
Opponents of the legislation say Mexicans are the ones who will be on the losing end of the reform.
The left fears that Pemex, Mexico's main source of tax revenue, will be privatized and that the country's oil riches will leave the country.
During a visit to Mexico last week, California Governor Jerry Brown warned lawmakers that if they failed to pass tight regulations, foreign firms "will eat you alive."
But the government insists that the reform will boost economic growth, modernize Pemex and reverse declining oil production.
Using his own food metaphor, Pemex director Emilio Lozoya has said that foreign firms have shown a "very big appetite."
"The only thing left is for this hunger and interest, this investment, to translate into infrastructure and jobs," he said.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today foreign oil firms brace for mexico comeback Arab Today, arab today foreign oil firms brace for mexico comeback

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today foreign oil firms brace for mexico comeback Arab Today, arab today foreign oil firms brace for mexico comeback

 



Arab Today, arab today
Arab Today, arab today Designer Aql Faqih aspires to innovation

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation
Arab Today, arab today Barcelona through George Orwell’s eyes

GMT 13:44 2017 Friday ,20 October

Barcelona through George Orwell’s eyes
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today 35 Egyptian police, troops die in clashes

GMT 04:36 2017 Saturday ,21 October

35 Egyptian police, troops die in clashes
Arab Today, arab today Hiring not part of Alibaba pledge

GMT 11:26 2017 Wednesday ,18 October

Hiring not part of Alibaba pledge
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today World's deepest lake in peril

GMT 15:54 2017 Friday ,20 October

World's deepest lake in peril
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Delhi braces for pollution 'airpocalypse'

GMT 16:07 2017 Friday ,20 October

Delhi braces for pollution 'airpocalypse'
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Sweden to get biggest car factory

GMT 14:10 2017 Friday ,20 October

Sweden to get biggest car factory
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Actress Shery Adel happy for Egypt’s qualification

GMT 08:57 2017 Wednesday ,18 October

Actress Shery Adel happy for Egypt’s qualification
Arab Today, arab today Massacre fears spark race

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race

GMT 07:47 2017 Tuesday ,17 October

Hussein Fahmy happy for honoring in festival

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 06:43 2017 Wednesday ,18 October

Fake dentists ply brisk trade

GMT 06:49 2017 Tuesday ,17 October

EasyJet, Lufthansa among seven to bid

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 20:46 2017 Thursday ,19 October

Qualcomm files lawsuits in China to ban iPhones

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday