Awaiting the Mexican Wave – Challenges to energy reforms and raising oil output

This comment analyses the potential impact of the proposed Mexican energy reforms in light of the current state of Mexican oil production. It identifies the main themes behind the reforms and evaluates the prospects for shallow, deepwater and shale resources, along with the midstream and downstream sectors. The comment notes that while Mexico offers significant opportunities, financial and political challenges will limit foreign investment until after 2016, thereby preventing any material impact on Mexican production or on global oil supplies until after 2020. The steep decline rates at existing fields and a beleaguered midstream and downstream sector, which are not tackled by the reforms, will also likely limit foreign investment.

By: Shweta Upadhyaya