President Enrique Pena Nieto speaks at a ceremony at the National Palace in Mexico City after signing the reform package into law

Mexico takes first step in major energy reform

The first steps towards opening up Mexico’s energy sector were taken as President Enrique Pena Nieto signed a package of laws that will serve as a rule book for the process.

The sweeping reform will end the decades-long monopoly enjoyed by Mexico's two state-owned energy behemoths, national oil company Pemex and electricity utility CFE, by opening up new opportunities for investment across the industry.

The government hopes that increased competition will lure billions of dollars in investment to the country's ailing oil, gas and electricity sectors. Pena Nieto has made the energy overhaul the top economic priority of his administration, which aims to boost slumping growth in the world's 15th biggest economy.

A so-called Round Zero allocation of oil and gas fields that Pemex will keep is to be unveiled tomorrow and the energy ministry will also announce later this week which fields will be put up for grabs for foreign and private oil companies in the first round of public tenders, expected to take place next year.

International oil and gas companies such as Royal Dutch Shell and ExxonMobil have been monitoring the legislative process and are widely expected to compete for newly established development contracts and licenses as early as next year.

"Mexico has created a solid framework to make the energy sector more competitive and attractive to private investment," said Shell Mexico president Alberto De La Fuente in an emailed response to questions.

"We will review strategic opportunities in Mexico that could generate value for both our company and the country."

Patrick McGinn, a spokesman for ExxonMobil's upstream division, said the company welcomes the reform but emphasised that future projects in Mexico will have to compete.

"We will pursue potential investment opportunities in Mexico that are competitive with other opportunities around the world," he said.

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