Mexico says reforms will benefit Canada
Ambassador says changes in energy sector offer ‘huge’ investment opportunities
Controversial energy reforms in Mexico are being lauded as a “huge” opportunity for Canada’s oil and gas sector, even as they’ve sparked fresh warnings over the need to diversify Canadian energy exports into other foreign markets.
Mexican President Enrique Peña Nieto last week introduced what his government is billing as historic reforms to end the state’s 75-year-old monopoly over Mexico’s energy sectors and open them up to foreign investment.
The reforms are partly intended to reverse a steady decline in production from state-owned oil company Petroleos Mexicanos (Pemex), which has gone from a high of 3.7 million barrels per day in 2005 to 2.5 million today.
But they are also central to an economic strategy that Peña Nieto and his government hope will boost growth within the country to around six per cent per year.
Previous Mexican governments have tried without success to open up the country’s energy market, but it appears Peña Nieto’s ruling coalition has the votes to succeed even if popular opinion in Mexico is largely against the move.
Mexican Ambassador Francisco Suarez said Tuesday that the reforms will be a boon for Canada by opening “huge” investment opportunities for Canadian companies.
Suarez said Mexico is also hoping the reforms will benefit North America as a whole by increasing competitiveness throughout the continent while positioning it as an “energy powerhouse.”
“This shifts the energy balance of power, worldwide,” he said. “A stronger North America, a dynamic North America, and a North American powerhouse in energy will change the world to the good.”
Yet the reforms in Mexico have already prompted fresh calls for new pipelines and other methods of getting Canadian oil and gas to foreign markets.
As Mexico’s oil production dropped over the past decade, Canada overtook the Latin American country as the top energy supplier to the U.S.
Canadian Chamber of Commerce president Perrin Beatty predicted Mexican energy exports to the U.S. will increase if the reforms go through and production climbs.
That threatens to cut into Canada’s share of the market.
“It really underscores the importance of our being able to transport our energy to global markets and ensuring our capacity to get it there,” Beatty said. “We need to achieve this as rapidly as possible because otherwise we’re trapped.”