On December 5, 2016, several U.S. oil companies were among the winners of petroleum contracts awarded by the Mexican Hydrocarbon Commission to develop deep water projects in the Gulf of Mexico. From a legal standpoint, an initial assumption could be that the North American Free Trade Agreement (NAFTA) became more relevant to these “American” companies entering into the Mexican oil market. Indeed, the legal regime provided by NAFTA Chapter 11, which was designed to protect property rights in long-term investments, could be essential to ventures involving operations that might last for over two decades.
Later, President-elect Donald Trump announced Rex Tillerson as his nominee for Secretary of State. Until 2016, Tillerson was the CEO of Exxon Mobil, one of the U.S. oil companies investing in the new projects in Mexico. During the first year in office, Trump and Tillerson, assuming Tillerson is confirmed by the Senate, will navigate national and international politics to grapple with issues arising from promises made during Trump’s presidential campaign. Among these promises was Trump’s pledge to renegotiate or to terminate NAFTA.