Mexico will drop a 75-year old ban on outside investment in its oil fields. How will energy stocks respond?
In a move to help stimulate the Mexican economy and usher in billions in foreign investment, Mexico's Congress voted to de-nationalize its country's oil fields.
Mexico has one of the biggest crude deposits in the Western Hemisphere, although lagging production from the national entity designed to oversee Mexican oil has hampered revenues for decades.
By allowing foreign investment, Mexico is expected to double its output to about 2.5 million barrels per day, outpacing a number of world's biggest oil producers.
The move would lead to as much as $15 billion in direct foreign investment, and add about a half a percentage point to Mexico's economic growth forecasts. Big oil companies will be able to start gaining licenses to drill as soon as the new laws are ratified by local authorities, who are mostly assumed to be pro-oil.
Major energy stocks have had differing expectations as to how Mexico could change the global energy landscape. The new supply could make North America one of the biggest oil reserves in the world, and even cause a surplus if certain export restrictions in the US aren't pared back.
Click on the interactive chart to view returns of "big oil" stocks over time.
However beyond that, there are a number of factors that make Mexican oil hard to get to. Namely the country's infrastructure is out of date after 75 years of mismanagement. Billions in new roads and pipelines will be needed before oil production will even come close to capacity.
Click on the interactive chart to view performance of America's biggest pipeline manufacturers by market cap.
And you've also got oil extraction stocks, who will probably be climbing over each other for Mexican contracts as well. They've already had a huge year on the back of the shale-boom in the US – but can also be sure Mexico's oil wells are going need some help updating their technology.
Lastly, you've also got basically the entire financial sector – if North America surpasses pretty much every nation in OPEC, it'll be a pretty big catalyst for further spending on the continent.
So do you see investing opportunities in Mexico's oil boom? Use the list below of energy stocks – major players in the oil industry – to begin your own analysis.
1. BP plc (BP, Earnings, Analysts, Financials): Provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. Market cap at $144.80B, most recent closing price at $45.69.
2. Exxon Mobil Corporation (XOM, Earnings, Analysts, Financials): Engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. Market cap at $425.80B, most recent closing price at $95.31.
3. Chevron Corporation (CVX, Earnings, Analysts, Financials): Engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. Market cap at $231.42B, most recent closing price at $119.90.
5. Enbridge Inc. (ENB, Earnings, Analysts, Financials): Engages in the transportation and distribution of crude oil and natural gas primarily in Canada and the United States. Market cap at $34.53B, most recent closing price at $41.38.
7. Halliburton Company (HAL, Earnings, Analysts, Financials): Provides various products and services to the energy industry for the exploration, development, and production of oil and natural gas worldwide. Market cap at $42.48B, most recent closing price at $49.39.
8. Schlumberger Limited (SLB, Earnings, Analysts, Financials): Supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. Market cap at $114.16B, most recent closing price at $86.37.
(List compiled by James Dennin. Analyst ratings sourced from Zacks Invesment Research, all other data sourced from Finviz.)
Analyze These Ideas: Getting Started
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Dig Deeper: Access Company Snapshots, Charts, Filings
- BP plc(BP, Chart, Download SEC Filings)
- Exxon Mobil Corporation(XOM, Chart, Download SEC Filings)
- Chevron Corporation(CVX, Chart, Download SEC Filings)
- ConocoPhillips(COP, Chart, Download SEC Filings)
- Enbridge Inc.(ENB, Chart, Download SEC Filings)
- Kinder Morgan, Inc.(KMI, Chart, Download SEC Filings)
- Halliburton Company(HAL, Chart, Download SEC Filings)
- Schlumberger Limited(SLB, Chart, Download SEC Filings)
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