6.250
%
Neutral
67
mm boe
84
%
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.
May 19, 2021
Americas - North
mm bbl
bcf
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.
Multiple (PSC/Concession)
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.
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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