Opening Mexico’s oil industry requires changing the constitution, and the Pena Nieto administration is weighing profit-sharing contracts for private companies, said Eduardo Medina Mora, the ambassador to the U.S. Allowing profit-sharing agreements is one of “several routes that could be followed” in the energy overhaul proposal that the government is drafting to submit to congress in the second half of the year, Medina Mora said.
Mexican President Enrique Pena Nieto, who took office in December, said during the campaign for last year’s election that he would make opening the state-controlled oil industry to more private investment his “signature issue.” He’s pursuing tax and energy overhauls to help wean the government off oil sales that fund a third of the federal budget and restore output at state-owned Petroleos Mexicanos after Mexico’s biggest oil discovery, Cantarell, collapsed over the past decade. “We have to provide certainty to players, to economic agents that would participate in this market,” Medina Mora said today in an interview at Bloomberg’s headquarters in New York. “It would very much help to have a constitutional amendment to do that.”