Over 85% of Mexico's crude oil exports were to India in 2013. Indian refiners including state-run Indian Oil Corporation as also Reliance Industries and Essar Oil are now importing crude oil from a new set of supplier countries, including Mexico. Imports from the Latin American nation have increased dramatically from $0.6 billion in 2010 to $3billion in 2013.
The comprehensive reforms open up Mexico's energy sector to private and foreign investors for necessary modernisation of the oil, gas and electricity sectors as well as to drive forward the country's renewable energy sector.
This means foreign companies Indians included will be able to bid on profit-sharing contracts to either jointly or individually participate in Mexican oil and gas exploration, production, refinement, transportation and storage, which up to now has been controlled by Petrleos Mexicanos (Pemex), the national petroleum company.
Private companies had been restricted to operate just as subcontractors of Pemex. The country's energy sector was nationalised in 1938. "Indian oil companies have invested aggressively in other countries and have shown interest in investing in deep water oil exploration and production. With the recently announced energy reform in Mexico, the sector opens up to foreign investors, creating new opportunities and the conditions to expand the spectrum of Indo-Mexican relations, which till date were limited to buying and selling of crude and refined oil and the outsourcing of services," said Jamie Virgilio Nualart Sanchez, ambassador of Mexico to India.
The energy reform is also a green reform because it promotes the use of cleaner fuels such as gas. It will also allow the production of energy based on renewable sources like solar, wind power, and geothermal energy, he added.
According to earlier reports, Mukesh Ambani promoted RIL was quoted as saying that it was also eagerly looking at opening up of exploration licences in Mexico.
Currently, ONGC Videsh, the overseas arm of India's largest explorer ONGC, has no presence in Mexico, as the country never allowed foreign companies to take up stakes in the hydrocarbon sector. It was allowing only service contracts.
According to industry experts, foreign companies including OVL are waiting for Mexico to firm up concrete contracts and the fiscal regime for participation in exploration projects. There may be possibilities that OVL partners Pemex to participate in the existing producing assets of Mexico if the new reforms allow it to do so.