Oil's slump a blow to Mexico amid touted energy reforms
Oil's slump a blow to Mexico amid touted energy reforms
By PETER ORSI, Associated Press | February 10, 2015 | Updated: February 11, 2015 3:13am
MEXICO CITY (AP) — The lowest oil prices in nearly six years couldn't have come at a worse time for Mexico, which last year opened up oil-sector investment to private companies for the first time in decades.
The landmark energy reform aimed to boost revenue by enabling Mexico to tap undeveloped fields and adopt newer technology to reverse a decade-long slide in production.
Instead, the drop in oil prices has forced Mexico's government to slash $8.4 billion from its 2015 budget, with most of the cutbacks expected to come in the energy sector. Analysts predict the energy partnerships made possible by the reform will attract initial bids lower than anticipated, some exploration projects will be delayed, and state oil company Pemex will see a cash crunch and slow job growth.
"If we continue for the next year in the scenario that we're currently in today, it will have an impact because Pemex, i.e. Mexico, will not be getting the same revenues that it's getting out of their current production," said Jorge Pinon, an oil and energy analyst at the University of Texas. "That's simple arithmetic."
More:
http://www.chron.com/news/world/article/Oil-s-slump-a-blow-to-Mexico-amid-touted-energy-6074404.php