The Mexican Congress, in a move that would have seemed revolutionary just a few years ago, this week is fast tracking legislation that will, for the first time since the late 1930s, open Mexico's vast oil and gas fields to exploitation by Texas firms, Newsradio 1200 WOAI reports.
The Constitutional Amendment allowing the move has already been approved by the local governments of Mexico's 31 states 'at a speed that would make the U.S. government blush,' said Luis Gomar, who is managing partner of the Mexico City office of the influential Texas law firm Strasburger & Price.
"The significance is, I would say, transformational for a country," Gomar told Newsradio 1200 WOAI from Mexico City.
President Enrique Pena Nieto has already said he will sign the seven enabling laws, and Gomar says Teas firms that have a Mexican partner may be able to go to work in Mexico's abundant shale oil fields by next year.
"They are really betting on energy reform to be the engine of the economy moving forward," Gomar said.
Analysts say Mexico realized that the inefficient and frequently corrupt state oil monopoly Pemex was ill equipped to take advantage of the fracking revolution which has opened up huge new fields of oil and gas in the Eagle Ford Shale, just north of the Rio Grande. He says the Eagle Ford 'doesn't stop at the Rio Grande,' and there are an estimated 46 billion barrels of recoverable reserves just in the shale fields of northern Mexico.
"This is a great opportunity for Texas based companies that deal in unconventional exploration and production," he said.
Opening Mexico's shale oil deposits also has the potential to transform a historically isolated and poor region where poverty and isolation has led to the rise of the murderous rug cartels, and has also been historically one of the leading sources of illegal immigration into the U.S. Analysts say the ability to get well paying jobs in northern Mexico's oil fields will be a lot more attractive to young men than becoming cannon fodder for the Zetas, or leaving behind their families for a life north of the border.
But Gomar says drilling for oil in Nuevo Leon will be a lot different than drilling in Karnes County.
"You will have significant security issues at your drilling site, mid stream, and in transportation," he said.
The Mexican cartels have increasingly attempted to seize control of railroads and coal mines, for example, to diversify as the U.S. market for Mexican drugs declines.
Originally published by Newsradio 1200 WOAI.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.