Oil industry employees from south Louisiana have worked just about everywhere there is oil and gas production, from our own offshore waters to the Middle East to the North Slope of Alaska, the North Sea and North Dakota.
And in the near future, there may be opportunities to work in oilfields in our nearest neighboring country. A delegation of Mexican government and oil company officials met last week at the LITE Center with local officials and oil industry leaders to discuss the possibilities.
Recent changes in Mexico’s constitution and oil policies have opened up the state-run oil industry to foreign investment. And Mexico hopes to entice Louisiana companies to look favorably on the idea of expanding southward.
That could spell positive things for Mexico and for Louisiana.
The presentation centered on the oil-rich state of Tabasco in southeastern Mexico. Tabasco is bordered by Guatamala on the west and the Gulf of Mexico on the north. The specific focus of the visitors was the Port of Frontera on the Gijalva River, one of the state’s major waterways, which the Mexican government hopes to develop into a major port for oil-related activity.
Lafayette City Parish-President Joey Durel, who met with the Mexican delegation, said the oil industry there is “about to explode” and that they need “anything and everything,” to advance drilling off the Mexican coast. That includes expertise and equipment and people to operate the equipment.
And when it comes to the oilfield, we in Louisiana do have just about everything they might be looking for.
And the opportunities go beyond fulfilling direct needs for exploration and drilling. There is a need for oilfield support services and even things like housing, stores and restaurants in the area, Durel said.
The visitors from Mexico, among them, Mauricio Garcia Palacios, president of the Association of Southeastern Mexico Oil Cos., showed a video inviting the people of Louisiana’s oil industry to “let us be your home away from home.”
It appears that Louisiana has more in common with Tabasco than oil reserves and a famous pepper by the same name. The state, known as “Mexico’s Eden,” boasts lush forests, coastal marshlands and even alligators.
There are some details that still have to be worked out before a deal — or series of deals — can be struck. One of the most important of those details is taxation.
If U.S. companies explore or drill for oil in Mexico, they can expect to pay taxes to that nation. Business taxes in Mexcio tend to be high, but international treaties have been worked out to help make the climate more hospitable for foreign investors, according to a recent article in The Daily Advertiser.
The tax rates will have a strong bearing on whether such a business alliance would be profitable to Louisiana’s oil companies, Durel said. If the rates are reasonable, there is little to stop the state’s oil industry from expanding southward.
A delegation from Louisiana will travel to Mexico in April to attend an oil show there, where they hope to learn more, Durel said.
If all goes well, the Louisiana oil industry could be taking its next logical step.
A deal that would allow local companies to explore the oil-rich areas of Mexico could be mutually advantageous, giving a boost to the local economy of Tabasco, as well as pumping more money into Louisiana’s oil economy.