Mexico

Investment & Operational Criteria

Key Indicators

Risk Premia

6.250

%

Outlook

Neutral

Rating

B|2H|±

Ranking

67

Reserves (1P)

Total

mm boe

Oil

84

%

Summary

While Mexico has made great strides in opening up the offshore, onshore remains a difficult place to operate, not only for ingrained attitudes towards independents, but also general working practices.

Updated

May 19, 2021

Country Basics

Region

Americas - North

Reserves (1P)

Oil

mm bbl

Gas

bcf

Location

MexicoMexico

North America, bordering the Caribbean Sea and the Gulf of Mexico, between Belize and the United States and bordering the North Pacific Ocean, between Guatemala and the United States.

Outline

Tax Regime
Type

Multiple (PSC/Concession)

Tax Regime
Notes

In December 2013, the Mexican Constitution was amended to loosen restrictions on the energy industry. These constitutional amendments represented a game changer for Mexico’s state-owned hydrocarbon resources, as the basis to expand the types and nature of hydrocarbon investment contract models with private investors.

Investment & 
Operational
Climate

Investors report regulatory changes, the shaky financial health of the state oil company Pemex, and a perceived weak fiscal response to the COVID-19 economic crisis have contributed to ongoing uncertainties. In the first quarter of 2020, the three major ratings agencies downgraded both Mexico’s sovereign and Pemex’s credit ratings. Most financial institutions, including the Bank of Mexico, have revised downward Mexico’s GDP growth expectations for 2020, ranging from -4.6 to -8.8 percent (Banxico consensus). Uncertainty about contract enforcement, insecurity, informality, and corruption also continue to hinder Mexican economic growth. These factors raise the cost of doing business in Mexico.

Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.

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