youR eneRgy
Mexico’s plans to reinvigorate its oil industry may pose a serious threat to the Canadian oil and gas sector. The country is among the 10 largest producers of oil, but production and exports to the United States have suffered as a third of state-owned Pemex’s revenues are diverted to the federal budget, leaving little room for investment and exploration. “Nonetheless, recently enacted and potential reforms could liberalize the sector and promote greater foreign investment,” the U.S. Department of Energy said in its country report. The government is planning to open the sector, which could bring in oil majors and billions of dollars of investment into the Mexican hydrocarbons sector. “We can’t do it alone,” Emilio Lozoya, Pemex’s chief executive, told the Financial Times on Wednesday. “We need to change Mexico’s legal framework so that companies can share risks.” New legislation could come as early as this summer if lawmakers pass the energy reform proposal of President Pena Nieto, below, the paper said. To date Canadian producers have done well to displace Mexico’s heavy Maya crude, but a resurgent Mexican production plan could compete more aggressively for U.S. Gulf Coast refineries and make a more concentrated effort to capture the shrinking U.S. oil imports market. Mexico’s production stood at about 2.85 million barrels per day last year, with proven oil reserves of 10.2 billion barrels, mostly of the heavy crude variety, according to the U.S. Department of Energy.