Oil-Price Collapse May Aggravate Producing Nations’ Other Problems

1/5/2015 Oil & Gas Journal

energy - oil barrelsThe recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing nations, speakers suggested during a Feb. 4 discussion at the Woodrow Wilson International Center for Scholars.

“Mexico is a perfect storm—a serious production decline and a low oil price,” said Duncan Wood, who directs the center’s Mexico Institute. “It instituted modest energy reforms that look more like service agreements than production-sharing contracts. This might explain why only seven [international oil companies] have asked to see data rooms for the 14 offered contracts. There’s a perception the program has failed.”

Continued lower crude prices could force Mexico’s government to make moves so there would be more interest from outside the country, Wood said. “If it does, it could affect social programs and affect the popularity of [President Enrico Pena Nieto’s] government.”

Read more…

Watch the video from the event here.

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