Daniel Yergin: Private Sector Will Bring Benefits To Mexico And Its Oil Industry

See Daniel Yergin: Behind Mexico's Oil Revolution The country's leaders saw America's energy boom and didn't want to be left behind by Daniel Yergin, today's WSJ. Excerpts:

"Mexico has overturned the 1938 nationalization of its oil industry and opened its energy sector to outside investment."

"Between 2004 and 2013, while the world oil price increased from $20 a barrel to around $100, Mexico's production declined by 27%."

"Mexico's considerable potential in deep water has gone untapped. Pemex simply did not have the technical capabilities"

""We can see what is going on in the United States," Pemex CEO Emilio Lozoya told me after last week's vote. "Shale gas in the United States created a sense of urgency for us."

"While Mexican oil production has been declining since 2004, oil production in Texas has increased by more than 150% and today exceeds all of Mexico's output. Mexico may also have significant potential from shale and tight oil, but, as with deep water, Pemex hasn't exploited those opportunities"

"the leftist Party of the Democratic Revolution (PRD) abandoned the coalition and became a fiery opponent"

"the law now provides for a number of different kinds of contracts. Some would permit foreign companies to book Mexican resources as reserves under U.S. Securities and Exchange Commission rules. And that is what most international companies will require, since reserve additions are a key criterion by which investors judge their performance."

"Any Pemex project, even as small as $5 million, needed approval from the government Treasury. But now Pemex gains autonomy and will be able to act more like a company than a branch of the civil service. No longer will five directors from the powerful oil-workers union sit on the company's board.

The new Pemex can partner with international companies, which will enable it to benefit from the development of resources that now lie fallow"

"The left-wing PRD party and its sympathizers will continue to denounce the reforms as treason"

"With an expanded resource base, the government will get more revenues."