Financing Mexico’s oil opening

Reserve-based lending could help bring cash into the country's oil patch—if regulators can get the rules right

Mexico's energy reforms have put the country on the map for international oil companies. For the first time in more than 70 years, private firms can take part in its upstream oil and business alongside state-run Pemex. A big question for these private companies, especially smaller exploration and production players, is how they are going to finance their new Mexican business. To open up the country's upstream, new types of contracts are being offered which, while used elsewhere, haven't been implemented in Mexico before. Specifically, Mexico is now awarding private investors production-sharing contracts (PSCs), which allow a percentage of the output as payment, as well as licence agreements