The oil and gas industry has long been characterised by rapid development and maximising opportunities. International oil companies are keeping a close eye on operations worldwide, looking for different types of projects, and host countries are looking for ways to attract these international investors.
Similarly in Latin America, each country has somehow solved the problem of reducing the competitiveness of its oil and gas industry as the relevant host country regulatory authorities compete for oil and gas investment.
In the transition from fossil fuels to renewable energy, the dominance of oil and gas will gradually decline over time, and oil producers need to maximize the value of their reserves. Despite long periods of time pressure, oil companies generally conduct a comprehensive analysis of political risks and regulatory frameworks in target countries, focusing on how these issues affect the economics of potential projects.
In the race for oil and gas investment, Mexico appears to have gained the upper hand through energy sector reforms in the hope of securing more investment.
Mexico's energy reform
One might argue that the race began in December 2013, when a sweeping energy reform bill officially became Mexico's law. A few months later (August 2014), nine new laws and current law amendments implemented the constitutional energy reform in December 2013 and established a new legal framework for Mexico's energy industry.
The major shift in energy policy is Mexico's decision to allow private companies to invest in the country's oil and gas industry. It is worth noting that, before the reforms, Mexico was smart enough to borrow from its Latin American counterparts (competitors) to try to meet the demands of the market. There is no doubt that Mexico has learned a lot from Brazil's experience, especially from its many mistakes.
