Welcome!

News Feed Item

Former U.S. Ambassador Antonio Garza on Mexico's Energy Reforms

Mexico: An Energy Future

AUSTIN, TX--(Marketwired - December 18, 2013) - Mexico took a giant leap toward a new economic future last week with Congressional passage of a remarkably bold energy reform bill. Both euphoria and hand wringing ensued as Mexico observers and the Mexican people began contemplating the significance to the country of opening its long-protected oil and gas industry.

These emotional reactions, though deeply felt, will soon subside; giving way to the realization that there's much hard work ahead and that the road to reform is long and potentially strewn with obstacles.

But there's every reason to believe that President Enrique Peña Nieto's administration is attuned to the challenges. After all, there's been quite a lot of discussion -- albeit largely of the academic sort -- about how to revamp the sector. And Mexico surely stands to benefit from the examples of previous reform efforts in the hemisphere and beyond, namely in Brazil, Colombia, Peru and Norway.

The measure that emerged from Congress last week barely resembled the initial, cautious, proposal presented in August by the governing Party of the Institutional Revolution (PRI). That middle-of-the-road effort, which would have introduced profit-sharing agreements, was judged unappealing by the foreign firms whose investment and expertise Mexico's energy sector desperately needs to overcome its woes.

And so a new, more transformative piece of legislation was produced by what is known as "the art of political compromise." It's a craft that has been evident throughout Peña Nieto's first year in office, facilitated by the three-party accord known as the Pact for Mexico. But with the leftist Party of the Democratic Revolution (PRD) unwilling to negotiate meaningful change for the energy sector, the Pact inevitably dissolved. The PRI and the conservative National Action Party (PAN) remained at the bargaining table and together produced a reform more far-reaching than many analysts had thought possible. 

The approved legislation reforms Mexico's constitution by ending the oil and electricity monopolies (PEMEX and CFE, the Federal Electricity Commission); allowing private oil companies to explore for and produce oil and gas under a variety of contracts, including services, production or profit-sharing, and licenses; creating a sovereign fund to manage oil revenues; and, revising the nature and governance of the PEMEX board.

It took less than a week for the constitutional changes to be ratified by a majority of state legislatures: 17 of Mexico's 31 states approved the reform within five days of its Congressional passage. Senate recognition of the state actions and the President's signature will soon follow.

The proximate step will be far more challenging: translating constitutional reforms into workable policies. This secondary legislation, also called implementing laws, will stipulate the policy framework and legal processes required to carry out the reform.

These measures are highly anticipated and potentially will set the stage for as much as $20 billion a year in new investment in the sector. They must clarify roles (for all actors in the sector, from private companies and regulators to PEMEX, CFE and other government entities) and establish the mechanisms and procedures by which the country's energy resources will be developed and distributed. Among the details to be addressed are which oil and gas blocs will be developed, when, and under which terms and how costs will be established and recuperated.

Adding to this daunting task is an aggressive time frame stipulated in the reform for developing the follow-on laws and regulations, and pressure from continued political opposition from the left can't be dismissed as a potential complication.

Still, Mexico has taken the crucial first step toward reforming its energy sector. The arduous work of building a framework and policies that can bring Mexico's energy sector into the modern era and enable the country to realize its great economic promise is underway. The excitement of this moment is real, for Mexico and anyone concerned about this hemisphere's future.

Antonio Garza is a former U.S. Ambassador to Mexico, Counsel in the Mexico City office of White & Case and Chairman of Vianovo Ventures. He can be found online at www.tonygarza.com and on Twitter, @aogarza.

The following files are available for download:

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
The demand for organizations to expand their infrastructure to multiple IT environments like the cloud, on-premise, mobile, bring your own device (BYOD) and the Internet of Things (IoT) continues to grow. As this hybrid infrastructure increases, the challenge to monitor the security of these systems increases in volume and complexity. In his session at 18th Cloud Expo, Stephen Coty, Chief Security Evangelist at Alert Logic, will show how properly configured and managed security architecture can...
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Unless you don’t use the internet, don’t live in California, or haven’t been paying attention to the recent news… you should be aware that self-driving cars are on their way to becoming a reality. I have seen them – they are real. If you believe in the future reality of self-driving cars, then continue reading on. If you don’t believe in the future possibilities, then I am not sure what to do to convince you other than discuss the very real changes that will roll out with the consumer producti...
A critical component of any IoT project is the back-end systems that capture data from remote IoT devices and structure it in a way to answer useful questions. Traditional data warehouse and analytical systems are mature technologies that can be used to handle large data sets, but they are not well suited to many IoT-scale products and the need for real-time insights. At Fuze, we have developed a backend platform as part of our mobility-oriented cloud service that uses Big Data-based approache...
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
As the rapid adoption of containers continues, companies are finding that they lack the operational tools to understand the behavior of applications deployed in these containers, and how to identify issues in their application infrastructure. For example, how are multiple containers within an application impacting each other’s performance? If an application’s service is degraded, which container is to blame? In the case of an application outage, what was the root cause of the outage?
SYS-CON Events announced today that Ericsson has been named “Gold Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Ericsson is a world leader in the rapidly changing environment of communications technology – providing equipment, software and services to enable transformation through mobility. Some 40 percent of global mobile traffic runs through networks we have supplied. More than 1 billion subscribers around the world re...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, will show how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningfu...