Mexico's energy reform could spur opportunities for Colorado oil and gas companies

Cathy Proctor

Reporter-Denver Business Journal

bizjournals.com

The newly reformed Mexican energy market is expected to attract more than $1 trillion worth of investment, and Colorado energy companies could have a role to play, according to organizers of an October 30th seminar focusing on opportunities in the emerging sector.

"It's important for people and companies in the U.S., Denver and Colorado to understand that the Mexican energy reform is transforming the energy landscape in Mexico — it's been a monopoly for 75 years," said Juan Carlos Prieto Williams, the founder and director of the Bilateral Council in Mexico City, one of the organizers of an October 30th forum on the reforms at the Denver Metro Chamber of Commerce.

The Bilateral Council is a private consulting firm that works with governments, non-governmental organizations, companies and investors interested in U.S.-Mexico trade and investment.

Mexico is among the 10 biggest oil producers in the world and the third biggest in the Western Hemisphere behind the United States and Canada.

In mid-August, Mexican President Enrique Peña Nieto signed reforms into law that for the first time since 1938 open that nation's energy sector to private investment from domestic and international companies.

The nation is ending the 75-year monopoly held by the national oil company, Petroleos Mexicanos, or Pemex, that barred foreign participation in the nation's energy sector and also restricted domestic Mexican energy companies from competing with the national company.

The changes are expected to pull significant investment into the country, and boost energy production within the nation.

In just the area immediately south of the border, the reforms are expected to pull in an estimated $1.2 trillion of investment in the Eagle Ford Shale play, which runs along the Texas-Mexico border, according to a January report by BBVA Compass.

Williams said the Denver event was organized because the state has a large oil and gas presence and Gov. John Hickenlooper made a trade mission to Mexico in June to promote between Colorado and Mexico.

"It made perfect sense for Mexico to also explore a partnership with Colorado," Williams said.

"There are many short-term, medium, and long-term opportunities, from deep-water drilling to smaller companies such as engineering firms and support companies that Mexico definitely needs," he said.