Home' Trinidad and Tobago Guardian : April 24th 2014 Contents Alot has been happen-
ing in Mexico's ener-
gy sector as it con-
tinues to open up the
One of the most significant signals
Mexico's President Enrique Peña Nieto
has sent to foreign investors in recent
times is the opening up of its oil indus-
try.Mexico is part of the G-20 nations,
which means it is in the world's top
20 largest economies and has been
pushing market-oriented reforms to
bring in investors and boost economic
Last December, United States busi-
ness magazine Forbes called the deci-
sion in Mexico's Congress to open up
its US$95 billion oil industry to foreign
capital as the most "far reaching"
reform in the 75-year history of the
Mexican oil industry.
Despite Mexican leftist groups out-
side the Congress carrying banners
that read: "No to the privatisation of
the state run oil company Pemex," the
vote in the Mexican Senate was 95 to
28 in favour of opening up the industry
to foreign investment. That vote will
allow foreign companies to explore and
develop oil fields for the first time since
President Lázaro Cárdenas expropriated
major US, British and Dutch oil com-
panies in 1938.
Cuauhtémoc Cárdenas, a three-time
presidential candidate and son of the
president who nationalised the oil
industry, declared in a television adver-
tisement: "We must defend our oil."
Carlos Slim, Mexican billionaire and
one of the world's richest men, is
expected to take advantage of this as
he already has investments in the ener-
gy sector in other countries as well as
foreign companies like Exxon Mobil
Corp, UK's Petrofac and Spain's Rep-
sol.Under the bill, the world's tenth
largest oil producer will permit profit
sharing contracts, production sharing
contracts and licences. In profit sharing
contracts, oil firms will be paid in cash,
in production sharing contracts, oil
barrels will be divided in a percentage
yet-to-be determined between the gov-
ernment and the companies, and in
the case of the licenses, major oil com-
panies will take control of oil at the
well head, paying royalties and taxes
to a newly-created oil holding trust to
be run by Mexico's central bank.
A survey published in June 2013 by
the Mexico City-based CIDE university
showed 65 per cent of Mexicans
opposed foreign investment in the oil
Another poll by the newspaper
Excelsior in August showed 63 per cent
backed Nieto's plans to change the
constitution to allow more private
investment in the energy industry.
The New York Times, in a December
2013 article, said Mexico's state run
Pemex "is known for inefficiency at
best and corruption at worst."
Commenting on Mexico's opening
up of its oil industry, Thomas Donohue,
president of the US Chamber of Com-
merce, told The Associated Press:
"We are going to be able to develop
services and competencies in dealing
with energy that are transferrable from
one country to another. They all have
some differences in commodities and
have their own regulatory systems, but
all of it will be in the context of a lot
damental ability to attract manufac-
turing, to improve supply chain and to
drive the creation of jobs and economic
Pemex has an estimated 155,000
employees, of which about 101,000
are unionised, according to Mexico's
Centre for Economic Investigation and
What lessons this may have on the
rest of Latin America and the Caribbean
is left to be seen, especially on energy
producing countries like T&T and
Runrunes, a Venezuelan Spanish
news Web site, argues that other Latin
American and Caribbean nations can
learn from Mexico opening up its oil
industry to foreign investment.
"All this leaves Venezuela facing a
series of lessons and challenges. First,
the really efficient national oil com-
panies are those that focus on their
core activities, maximise revenue and
their citizens to avoid politicisation, as
Norway's Statoil and Brazil's Petrobras.
"In this sense, PDVSA must return
to its oil tasks, reduce its involvement
in partisan politics and the positions
of minister of energy-controller-agent
and president of PDVSA-operator
should be exercised by different people
to reduce discretion, which leads to
inefficiency, mismanagement and cor-
APRIL 2014 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
investment and business. The Mexican Embassy
confirmed that a representative from T&T would be
there. Mexico is doing this for all the Caribbean
islands," he said.
The two other ACS projects are the prevention of
natural disasters and the System of Territorial Infor-
mation for the Caribbean, he said.
"This is to be able to disseminate all kinds of ter-
"At the United Nations, they manage this pro-
gramme. They can gather information in anticipation
for natural disasters and most countries profit from
this UN initiative. But there are 11 Caribbean islands
that are not connected to this. The most common
reason is they do not have the infrastructure. We
want to facilitate the resources for this."
Múnera said natural disasters can affect tourism
which, in turn, affect several economies.
"We are hoping these two projects improve the
capacity to prevent the impact of natural disasters."
He said the summit will seek to develop a timeline
to accomplish goals identified at the meeting.
"I think this will be in terms of three to four years,
we are going to do that. These are four specific and
important areas. Mexico is ready to support these
projects," Múnera said.
Building on experience
The ACS is celebrating its 20th anniversary this
year. Múnera said this will be recognised at the
In the last two decades, the ACS can boast of
The ACS is made up of all of Central America, the
Caricom, Dominican Republic, Cuba, Guadeloupe,
Martinique, Curacao, St Martin, Aruba and the con-
tinental countries of Venezuela, Colombia and Mex-
"One of the main achievements is that the ACS
has consolidated a space in which Caribbean countries
have a permanent dialogue with the Latin American
part of the Caribbean," he said.
Múnera pointed to the relationship between COPA
Airlines and the CAL.
"The ACS initiated this. Now we have that major
connection between the Caribbean and Latin Amer-
He spoke about making the Caribbean a region of
"The ACS ratified the agreement of Tourism Sus-
tainable Zones of the Caribbean. It means we all
agree on making the Caribbean an area for being
environmentally friendly. This means tomorrow, if
Tobago wants to be certified as a zone for this, it can
do this. Studies have shown that this gives countries
with this certification an advantage in the tourism
market. When you certify your site as ecologically
friendly, it means you have committed to protect the
environment," he said.
At the same time, he said there has been "weak-
nesses" of the ACS.
"The principal weakness of the ACS is that it has
not been able to build a real connection among the
people of the Caribbean. People do not know about
the ACS as we would like them to know. We have
to incorporate the civil society in the activities of the
ACS. However, we have been working with Caricom
and the Community of Latin American and Caribbean
Nations (Celac)," he said.
He spoke of a renewed energy among regional
countries to work on projects and have dialogue on
prosperity and wealth in the region.
"We have tangible projects that are working for
the people of the region. The ACS is an institution
that we must support and consolidate. We are more
experienced than we were 20 years ago. Our dialogue
is more fluid and fruitful. There is greater co-operation.
This is an indication that 20 years later, we are a
success," he said.
He said in the age of barriers breaking down and
a globalised world with countries working together,
multilateral bodies like the ACS are more important
"Probably 20 years ago, we knew it was important
to have a relationship among the Latin American and
Caribbean countries, but today we know it is a matter
of survival, in my opinion.
"Today, we need this relationship. It is what T&T's
Foreign Affairs Minister Winston Dookeran calls the
convergence model, which is forging this new rela-
tionship with enthusiasm," Múnera said.
From Page 4
Mexico opens up billion-dollar
oil industry to foreign capital
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