Dino Barajas Discusses Planned Reform for Mexico Oil Sector

Akin Gump global project finance partner Dino Barajas was quoted by Law360 for its article “Mexico's Oil Reform Plans Will Attract Intrepid Investors” on the topic of plans announced by Mexican President Enrique Peña Nieto to allow the private sector to invest in oil exploration and production.

Regarding the 1938 nationalization of the hydrocarbon industry that spawned Petróleos Mexicanos, the state-owned oil company, Barajas said, “It was one of the changes that followed the Mexican Revolution—it’s at the core of Mexican culture. If you change something that’s been part of the Mexican psyche overnight, there’s likely to be a public backlash.”

He added, “In the short term, it would have to be a gradual opening of the market, allowing private companies to jointly participate along with Pemex, rather than an outright sale of blocks. I don’t think political opinion would support that.”

Barajas did note that any reforms would need to be accompanied by broad-based political support as a confidence-building measure for oil and gas firms.  He noted, “The investment dollars are there, so this [proposed reform] would simply be the next permutation that’s been a long time coming.”

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