(This blog originally appeared on Platts.com)
Everyone knows there is a lot of oil in Mexico. Venezuela has its fair share, as do Brazil and Argentina. There’s even more oil to be found in Ecuador, and the Falklands is having its day in the sun. But the news about oil exploration and production investment today is predominately focused on the US and Canada. Why is that?
Decades of nationalistic sentiment have created a no-go area in Mexico and Latin America, with foreign nationals and major oil companies mostly conspicuous by their absence.
When Enrique Pena Nieto was elected last year as Mexico’s new president, he pledged to reform the oil industry. Last month, he proposed that Pemex, the state oil and natural gas monopoly, would be able to launch contracts on the basis of profit-sharing rather than production-sharing. But then the analysis started coming down, and it wasn’t good.