Mexico enacts energy initiative, to decide on blocks for bidding this week

8/11/2014

Mexico enacts energy initiative, to decide on blocks for bidding this week

MEXICO CITY -- Mexican President Enrique Pena Nieto today signed into law the rules governing the country's historic opening of the state-run oil, gas and electricity industries to foreign and private companies.

According to reports, the government, which is hoping for tens of billions of dollars in outside investment in deepwater oil drilling and shale gas production, says it will let potential investors know by Wednesday which blocks will be open for bidding.

On the investing side, HSBC analysts like how the new laws are shaping up, particularly the creation of a sovereign oil wealth fund, “as it constitutes a long-term savings mechanism to reduce the vulnerability of public finances and economic growth to global shocks.” As for equities, the firm sees opportunities for resource-hungry China as well as for major oilfield services companies such as Transocean, Halliburton and Schlumberger.

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