Mexico’s congress sent a bill to break the nation’s 75-year state oil monopoly to President Enrique Pena Nieto, who may sign the legislation within hours, according to Finance Minister Luis Videgaray.
The changes to the constitution proposed in the bill become law after they are published in the national gazette. The measure was passed by both houses of congress last week and by a majority of state legislatures this week.
The nation’s most significant economic reform since the North American Free Trade Agreement will allow companies such as Exxon Mobil Corp. (XOM:US) and Chevron Corp. (CVX:US) to develop the largest unexplored crude area after the Arctic Circle. Opening the oil industry to more private investment will help boost long-term economic growth and bring down the cost of electricity, which will help boost productivity, Videgaray said today in an interview on Radio Formula.
“We’re convinced that this reform will transform Mexico,” Videgaray said. “The big challenge now is implementing” the measure including the passage of secondary legislation, he said.
The economy will grow 3.6 percent next year, after 1.35 percent growth this year, based on the average of economists’ estimates in a Bloomberg survey.
The peso rose 0.6 percent to 12.8787 per U.S. dollar. The currency was the best performer after the British pound among 16 major counterparts tracked by Bloomberg.
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