Fox creates oil investment fund

Monday, 06 January 2014 00:10 
THE NEWS


Former President Vicente Fox has announced the creation of a $500 million investment fund for the Mexican oil industry in conjunction with the domestic and foreign business community.

Fox, a former member of the National Action Party (PAN), said that the recent approval of the energy reform — which seeks to open up Mexico’s state-run oil industry to private investment — has motivated him to seek ties with U.S. and Canadian investors and travel to the Middle East for his project to fund companies working in the country’s oil sector.

“It’s an investment fund that will work exclusively to finance Mexican or foreign companies that want to participate in this great opportunity for the oil industry,” he said. “There’s no name (for the fund), we’re going for $500 million, which has practically all been collected, and this is only an example (of what can be achieved with the reform).

“These are investors from around the world, the money is being collected from these investors and put in this fund and will be given to the companies that will participate alongside Pemex in the development of the oil industry.”

This fund, Fox said, will be used to back up the companies that have Pemex contracts. “Someone gets a contract with Pemex to install pipelines, that company associates with Pemex, and this fund is ready to finance it,” he said. “Or someone wants to do explorations with Shell Oil, participating companies will be able to finance themselves from this fund.”

Fox declined to reveal the names of the investors or companies that have provided resources for the fund, but said that he will travel to Abu Dhabi in the coming days to recruit more investors.

Both Pemex and the Federal Electricity Commission (CFE) have been given a period of two years to transition from government agencies to companies that, despite being state-owned, are nevertheless capable of independent decision-making and allowed to sign a wide variety of contracts with private investors.

The reform has awakened the interest of the private sector in investing in Mexico’s energy sector, but it has been opposed by Mexico’s leftist parties, who say that it will hand over the country’s oil wealth to foreigners.

The Democratic Revolution Party (PRD) hopes to overturn the reform with a binding referendum in the 2015 federal elections.