Yesterday The New York Times posted an article about the energy industry in Mexico. The article is about a recent move by the Mexican government to end state control of the energy industry in Mexico. The decision to deregulate has paid off.
The article reports:
The government began auctioning off rights two years ago to drill in parts of the Gulf of Mexico. On Tuesday, an international consortium of energy companies said they had discovered a large oil field, and another firm said it had discovered more oil than expected in a separate area.
The overhaul of the Mexican oil and gas sector in recent years eventually ended the state energy company’s seven-decade domestic monopoly on exploration and production. The aim was to arrest years of declining oil output, blamed on a slow-moving public sector that lacked the technology to exploit opportunities in deep-sea drilling, or shale oil and gas.
The two announcements on Tuesday appeared to suggest that Mexico’s strategy, which was met with criticism when it was first pushed through, was succeeding.
The consortium, made up of Premier Oil of Britain, as well as Talos Energy of Texas and the Mexican company Sierra Oil and Gas, said that it had discovered a field containing more than one billion barrels of oil in shallow water 40 miles off the Mexican coast. Riverstone Holdings, an American private equity firm that specializes in energy investments, owns 45 percent of Talos Energy and 43 percent of Sierra Oil and Gas.
It’s amazing what can be accomplished when there is an incentive to accomplish it!
There are two things to note here–like it or not, fossil fuel is the basis of the current world economy, and an improving Mexican economy may help slow down the pace of illegal immigrants coming to America from Mexico. This is a win-win situation for Mexico and for America. The free market works every time it is tried.