As Obama visits Mexico, the slippery topic of oil comes up
Share Now on:
President Barack Obama is in Mexico today, meeting with that country’s leader Enrique Peña Nieto. They’ll be talking immigration, border security and trade. But analysts say their conversation will likely turn to one touchy topic: Oil and gas reserves in Mexico. Twenty years after the North American Free Trade Agreement, Mexico’s oil reserves have remained closed to U.S. investment, but that may soon be changing.
There’s pretty much one brand of gasoline you’ll see in Mexico: Pemex, the state fuel monopoly. But Pemex is in trouble. Mexico’s oil production has been dropping, and in less than 10 years, the country could be importing more oil than it exports.
Analysts say the fossil fuel reserves are there. Mexico remains one of the world’s top 10 oil producers. There could also be tens of billions of barrels in untapped deep-sea oil reservoirs.
The country has, ”The proven fourth largest shale gas reserves in the world,” said Michael Shifter is president of Inter-American Dialogue.
Shifter said Pemex lacks the technology to tap those reserves. International companies have the expertise, but Mexico’s constitution prohibits joint ventures in the sector. Shifter said reforms maybe on the way.
”I think if there are joint ventures, U.S. companies would be very attracted to the opportunities in Mexico,” he said.
Arturo Sarukhán, who was Mexican ambassador to the U.S. until January, said he expects Mexico to introduce oil and gas reforms in July or August this year.
”This is a big strategic game changer,” said Sarukhán, who is now the chairman of Global Solutions, a consultancy within the Podesta Company.
He said those joint ventures could change the oil and gas game globally.
”By bringing Mexico’s energy assets to the table, overnight Canada, Mexico and the United States become the largest producer of oil on the face of the earth, far outstripping Saudi Arabia,” he said.
That should ensure that oil and gas keep flowing for years to come.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.