Fuel Fix Quotes Steve Otillar on Mexico Energy Policy Reform Efforts
In its article “Mexico moves to relax decades-old grip on oil,” Houston Chronicle energy blog Fuel Fix quoted Akin Gump energy partner Steve Otillar on whether reforming state-owned energy company Petróleos Mexicanos, or Pemex, would require a change to the country’s constitution or only changes in the 1958 law that prohibits production sharing with international oil companies.
Otillar said, “It is a common misperception that the Mexican Constitution prevents production sharing contracts that allow companies to be able to share in oil and gas. Many constitutions have similar language that says minerals are owned solely by the country—that is not unusual. What is unusual is that once you have captured it out of the ground, most countries will allow you to share it.”
He noted that the topic of opening up Mexico’s oil sector involves legal, political and international affairs issues and added that constitutional change might allay international oil companies’ concern regarding changing political winds on the sensitive topic: “As soon as you have any kind of law or movement where a foreign company could own any part of the oil, the lawsuits will come out of the woodwork. A constitutional change would send a clear message to the world that Mexico is open to the oil and gas business.”