Foreign investors do not mind Mexico's tight grip on energy industry

Jul 11, 2001 02:00 AM

Ernesto Martens, Mexico's Secretary of State, said Mexico requires about $ 70-bn worth of private investment over the next 10 years, but he believes foreign investors are prepared to deal with the government's tight grip on its energy industry. "I'm not selling Mexico. I'm asking people to look at Mexico," he said, when asked what he is doing to attract foreign companies to the region.
Mr. Martens, who is also head of the state-owned Pemex, said Mexico's energy requirements may be large, but companies such as WestCoast Energy and TransAlta have succeeded in the current business climate.
Mr. Martens, who arrived in Calgary for two days of meetings with energy firms and government representatives, has been downplaying Mexico's stand over loosening restrictions to foreign investment in its energy sector. The sector was nationalized in 1938, although private investment has been allowed into areas such as refining and marketing since 1995.

Vicente Fox, President of Mexico, has set a six-year target for the country to become energy self-sufficient. Ralph Goodale, federal energy minister, said Canada is not in a position to encourage changes.
"They have their objectives. There is clearly a good positive mood and momentum," he told. "The Mexican government and the Mexican congress will determine for themselves what they believe is the most appropriate in the circumstances."
Earlier, Mr. Martens told the country requires massive investment to double its electrical generation from the current 40,000 MW during the next decade. Demand is growing at a 6 % a year. As well, the country hasn't built a refinery in 10 years. Mexico is the ninth-largest holder of oil and gas reserves in the world.
Mr. Martens said Mexico is not looking for anything specific from Canadian energy firms, but rather is "making sure people have the information to make decisions." Mr. Goodale has met with Mr. Martens three times during the past six months to discuss business opportunities.

Last month a high-powered group of Canadian energy executives were flown to Mexico to meet with Mr. Fox, and an energy trade mission is planned for this fall. "There are tremendous areas of co-operation already with Canadian investments in Mexico," said Mr. Goodale.
"There is huge potential for more in the future. The important thing is to build the relationships, the understanding of where the opportunities are, and the terms and conditions upon which those opportunities can be pursued."

Source: National Post Online
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