North America is emerging as a virtual supply center of the international energy market, a development that has implications for the economic and geopolitical stature of the entire continent.
With the recent approval of Mexico's energy reform and the current enthusiasm of South American governments to attract foreign investment in oil, one might be tempted to conclude that the tide of resource nationalism is receding in the region. Nevertheless, the cycles of investment and expropriation that have characterized the oil sector in Latin America are unlikely to go away.
Mexico must address two key questions in order to realize the promise of greater employment opportunities: Does the country’s current workforce have the needed skills to adequately respond to increases in production, and is the country allocating the necessary resources to respond to the demand for future skills? This issue brief focuses on education's role in reducing the workforce skills gap that Mexico will face as the energy sector expands.
This issue brief proposes a framework for awarding bids in a public tender for exploration
blocks. The context for the proposal is Mexico’s energy reform of 2013-2014.
This issue brief examines the signals conveyed by Mexico's 2014 energy reforms, and analyzes the limitations in law, institutional design and policy that may delay, if not derail, the reforms' success.
Under proposed legislation to implement Mexico’s energy reforms, Pemex will remain a privileged state operator supporting exploration and production in most of the country's proven onshore and shallow water fields. It is not known if energy reform will effectively turn Pemex into a firm able to compete without policy bias against private investors.
Energy regulation under Mexico's energy-sector reforms are of great interest to investors, since autonomous regulators—protected from political pressures and able to make and sustain technical decisions—can guarantee greater legal consistency than government authorities exposed to political pressures. The difficulty was finding an alternative model that ensured the institutional strengthening of the agencies without relinquishing too much control of the executive branch.
Mexico's organized crime groups have expanded into areas that include the theft of crude oil, gas and gasoline. The impact of organized crime on the energy sector is a real threat to the intended effects of Mexico's energy reforms.
The violent struggle between rival Mexican drug cartels and other criminal groups has left tens of thousands dead and towns across Mexico paralyzed with fear. With overwhelmed police forces relatively powerless to control drug-related murders and kidnappings, a growing number of vigilante organizations, or self-defense
groups, aim to restore order — but now even they are fighting, and killing, among themselves.
