Oil find boosts prospects for Mexico's energy reform

Subject

Subject: Mexico oil opening gains momentum

Significance

An international consortium on July 12 announced the discovery of one of the largest oil finds in recent years, off the coast of Tabasco. The discovery, at the Zama-1 well, is the first major find by foreign firms in Mexico and comes amid a string of successful oil rights auctions that have provided fresh momentum to the energy reform agenda of President Enrique Pena Nieto’s government.

Impacts

• Mexico will be a rare bright spot for the global offshore drilling services industry, hard hit by the oil price downturn.
• Veracruz, Tabasco and Campeche, which will host onshore service sites for offshore operations, will see economic benefits.
• Regional competitors such as Brazil and Colombia will have to improve investment terms as competition heats up.