Mexico’s Congress on Thursday gave final approval to reforms that would open the country’s energy industry to foreign investment after 75 years of monopoly control by state-owned Petroleos Mexicanos (Pemex). Outside money, talent and expertise are seen as vital to exploiting the country’s vast oil and natural gas reserves and stemming oil production declines.

For years, Pemex has lacked the resources needed to fully exploit the country’s reserves. Mexico is the ninth-largest oil exporter and the country is thought to hold the fourth-largest reserves of natural gas locked in shales. But in recent years, oil production has hovered around 2.5 million b/d, down from a peak of 3.4 million b/d in 2004.

The lower house gave its final approval to the reform one day after the Senate gave its nod.

The reforms are intended to draw companies such as ExxonMobil Corp., BP plc as well as Baker Hughes, Weatherford and others to partner with Pemex through contracts for services and licenses or that share production/profits. Leftists oppose the reforms as they fear that they are a step toward the privatization of Pemex, which the government denies. The reforms are supported by the ruling Institutional Revolutionary Party (PRI), their allies the Green Party, and the opposition conservative National Action Party (PAN).

Private companies would be allowed to operate in Mexico’s oil and gas patch, which was nationalized in 1938. However, they would not be entitled to full-blown concessions. Some interpretations of the reforms have said that private companies would not have the right to book reserves on their balance sheets but would be able to report the projected gains from contracts for accounting purposes. This goes a long way toward what outside companies have said they wanted in order to participate in Mexico’s oil and gas sector. Currently, outside companies active in Mexico participate under service contracts for which they are paid a fee.

A new sovereign oil fund would be created and overseen by Mexico’s central bank to administer the proceeds of oil and gas development, except for the taxes paid to the government.

Assuming reforms are enacted as expected, the first area of focus for Pemex will be securing the resources needed to further exploit the country’s deepwater oil reserves, an oil and gas industry staffing company executive told NGI. Carolyn Stewart, regional business development manager for NES Global Talent, said her company has been in talks with Pemex and others in the country about the reforms and what they mean.

“Their focus right now is deepwater wells, particularly further exploiting the Gulf of Mexico,” she said. “I know that there’s about 19 wells that they’ve already drilled in deepwater. I can say just from the information that we’ve gathered that deepwater is going to be more of a focus, probably in this upcoming year, and probably quite a bit of that in the Gulf of Mexico and mirroring what some of the major operators have done here.”

While Mexico has a slice of the Eagle Ford Shale it can call its own, that will have to wait for later, Stewart said, as the company focuses more intently on boosting oil production.

“According to our meetings that we had with Pemex, the shale piece for them is still several years out. It’s really intrinsically all tied together because the infrastructure needs to come into place before they can actually go out and drill for the shale,” Stewart said. “But once the reform takes place, several U.S. companies have stepped up, such as Baker Hughes, Weatherford, and expressed an interest in going in.”

As Mexico’s upstream sector opens and expands, the greatest need for personnel will be for petrophysicists, geologists, geophysicists and the like — “the very heavy science end of the field,” Stewart said. “They can get the tool-pushers and the riggers from just about anywhere, but there’s a big push to get more of a professional presence. Pemex and other companies have partnered with some of the universities to put in some technical training programs to help develop that next generation because they are experiencing a talent gap just as we are here in the United States.”

Mexico’s electricity sector also is subject to reforms. Assuming they are enacted, private companies will no longer have to go through Mexico’s Comision Federal de Electricidad to sell electricity.