Mexican Oil: Mexican Policies Affect U.S. Trade and Investment Opportunities

GAO discussed issues affecting potential future U.S. trade with and investment in Mexico's petroleum industry. GAO noted that: (1) although Mexico's oil production and exports have remained relatively constant, its energy needs have increased; (2) the primary factors affecting Mexico's ability to meet current government oil production and export goals include the Mexican government-controlled oil company's ability to obtain investment capital for future exploration and production and strategy to modernize its operations; (3) Mexican government policies restrict private and foreign investment in Mexico's oil sector; (4) several U.S. oil-producing companies stated that they would be interested in investing in oil exploration and production in Mexico, if Mexico removes investment barriers; (5) Mexican government policies also impede foreign involvement in Mexico's oil service contracting industry; (6) although U.S. oil-producing companies' and Mexican officials' opinions on the benefits of investment by U.S. companies in Mexico's oil industry differ, neither U.S. nor Mexican company officials see any mutual benefits in having U.S. firms contract to provide goods and services to Mexico; and (7) U.S. agencies have taken such steps to support Mexico's petroleum sector as providing loan guarantees for large oil-related purchases, funding oil plant feasibility studies, and conducting bilateral energy consultations.