Mexico Passes Legislation to Open its Oil and Gas Market to Foreign Investment

Mexico Parts of America and the Middle East have long been considered the major players in the oil and gas market. And while that’s not necessarily incorrect, other countries such as Mexico are beginning to make waves with oil and gas extraction as well.  Mexico recently passed legislation that will likely make the country a larger player in the global oil and gas market. But not everyone is happy about it.

For more than 75 years, all of Mexico’s oil extraction has been undertaken by one firm: Petroleos Mexicanos, commonly called Pemex. Pemex was established in 1938 when the then Mexican president took the side of striking oil workers who were against oil companies that were foreign-owned.  The workers wanted an increase in pay and the ouster of foreign-owned oil companies in Mexico. The subsequent increase in pay and political jockeying all but eliminated foreign involvement in Mexico’s oil. Pemex’s reach is so substantial that even if a citizen discovers oil on their land, it is still Pemex property. Despite its nationalized position, Pemex is still heavily taxed, which has put the company in a poor financial situation that has limited its ability to further oil and gas exploration and extraction in Mexico. Its position also restricts access to technology from outside nations, crippling any technological advances. These factors have left Mexico lagging behind other nations in the oil and gas arena.

But all of that may be changing. In mid-December 2013, the Mexican Congress voted to end Pemex’s grip on the country’s oil production by allowing foreign oil companies inside the borders. The bill is a drastic one as it even changed parts of the country’s actual constitution. Proponents of the bill claim that offering contracts to foreign companies will bring in billions of additional revenue for the country and offer a competitive oil market for citizens, which will help keep prices low.  Opponents fear that foreigners will take advantage of Mexico, and will lose its source of national pride. Also, many Mexicans are concerned that foreign companies will ship money out of the country that would have otherwise remained in Mexico.

As production and revenue began declining over the past few years, it was time for Mexico to make a drastic change, but even experts are floored by the scope of this recent move. Estimates expect the subsequent oil boom to change the landscape of the oil industry. There is still a lot that needs to be done behind the scenes in terms of actual law making. But in 2014, the spotlight will be on Mexico to see how this change shapes the future of the entire industry.

Safety in the Oil and Gas Industry: H2S

Oil and Gas SafetyWorker safety in the oil and gas industry has improved dramatically over time, and working in the field is a much safer occupation today than it has been historically. Despite residual risks, employment opportunities in the oil and gas industry have increased wildly recently, as we’ve written about before.

The industry has identified many chemicals and natural hazards and mitigated the risks by setting regulations and standards in place to ensure the safety of employees. For instance, oil and gas drilling personnel may be working in areas with a high concentration of hydrogen sulfide, or H2S, which can cause serious injury or even death upon exposure. H2S is a highly toxic, colorless gas that appears naturally as a result of organic decomposition. The gas can be identified by its rotten egg smell, and prolonged exposure to the gas can damage the senses, leaving people without the sense of smell. Since H2S gas is heavier than air, the most concentrated hydrogen sulfide levels are found closer to the ground, making the gas potentially fatal to workers who pass out in its presence.

The oil and gas industry and its safety and regulatory commissions have addressed the problem of H2S exposure to reduce the risk of harmful injury or death on the job. When working in areas where high concentrations of H2S are present, workers must complete the required training courses before starting their assignments. Most workers are also required to wear H2S gas detectors and oxygen tanks at all times on the job. Working in pairs with oxygen tanks is another common way to reduce the risk of an H2S incident. If one worker should lose consciousness because of exposure to H2S, the second worker can provide the fallen worker with oxygen from their tank, move their partner out of the area, and then call for help.

The Occupational Safety and Health Administration (OSHA) keeps a very close eye on all employers in the oil and gas industry to ensure employees are provided the necessary equipment and hazard training. Employers and employees must be in compliance with OSHA standards and all rules, regulations outlined in the OSH Act of 1970. To reduce the risk of burns caused by explosions, workers are required to wear flame retardant clothing, boots, and hand protection while working around flammable and combustible materials.

Even with the abundance of training, certifications and protective equipment required in the oil and gas field, unfortunately accidents and injuries can still occur.  The industry is, and has been, working around the clock to come up with safer methods and processes to make working around heavy machinery, natural elements, and other materials safer for all industry employees.

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