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Daunting Days Ahead As Mexico Readies Oil Opening

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posted on Dec, 13 2013 @ 07:03 AM
Well, in stable times with a stable central Government? This would probably be good news for Mexico. Under these circumstances, for the reasons it's happening and with a confused and weak central Government? Well... Mexico is an OPEC member and a major producer. I think we'll be seeing the black gold rush preceded by some money to grease the way, very shortly.

MEXICO CITY (AP) — Mexico's sweeping away of seven decades of nationalist protections and letting foreign companies back into its oil fields is crucial to bringing the expertise and money needed to rejuvenate its sclerotic energy industry, supporters say.

But even after the strong approval given by both houses of Congress this week, skeptics ask whether Mexico has the ability or will to regulate the private contracts for the benefit of all Mexicans rather than just a few.

The final step for the energy package that passed Congress on Thursday is approval by the legislatures of 17 of Mexico's 31 states, because of its changes to the Mexican constitution.

The article goes on to say the passage is almost assured by the required number. While I can see benefits, I can see huge problems and risks too. For instance, one of the main issues seen as a benefit AND downfall, depending on who one asks, is the fact Mexico apparently doesn't have deep water drill and recovery capability on the same level as BP, Exxon and others. So, where the Gulf had some limits by the national Mexican Oil Company running things, it sounds like those limits will have largely faded to a question of contract prices and other considerations.

As one might imagine here, not everyone in Mexico is exactly thrilled with this.

Many Mexicans are less than enthralled with previous hand-overs of state-run business to private enterprise. The turnover of banking and telecommunications to the private sector in the early 1990s resulted in some of the highest lending fees and cellphone bills in the developed world.

"We don't know how to regulate or supervise absolutely anything," newspaper columnist Carlos Puig wrote this week. "We don't know how to put a public transit concession in order. If we can't do it with a few taxis, how are we going to do it with Exxon, Shell or BP?"

However this goes for Mexico, I hope it turns out well for the people down there. I can't immediately see how, but I still hope for their sake. They've been through enough in recent times with a civil war and issues of lawlessness. (Large scale theft is actually used as part of the reason to invite outside companies in, hoping they can do better)

Any way it's looked at though, it sounds like new Oil sources coming online, and a real potential for more problems related to the whole thing. Time will tell.

posted on Dec, 13 2013 @ 04:34 PM
reply to post by Wrabbit2000

I too hope it works out for the average Mexican. However:

...skeptics ask whether Mexico has the ability or will to regulate the private contracts for the benefit of all Mexicans rather than just a few.

I started trying to think of an example where something similar benefited all. I could not name any. Matter of fact, all I could come up with were examples where it turned out poorly for the average Joe. I hope I am wrong.

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