World Economy

Mexico Extends Hand to Malaysia

Mexico Extends Hand to MalaysiaMexico Extends Hand to Malaysia

Malaysian oil and gas (O&G) and energy companies have been urged to tap into the vast opportunities in Mexico which has recently opened its O&G and electric industries to private and foreign investors after over 70 years of state control.

Mexico's Ambassador to Malaysia Carlos Felix Corona said the energy reform recently announced that it has open the gates for direct foreign investment and profit-sharing in Mexico's O&G exploration, refinement, production, transportation and storage, which until recently was the monopoly of state-owned Petroleos Mexicanos Co. (Pemex), The Malay Mail reported.

He said Mexico invites foreign bids for O&G blocks from deep waters to mature fields and non-conventional reserves such as shale gas production from January 2015.

The Mexican government has identified 109 blocks for the first round of bids and expects investments of around $50 billion over the next four years, including partnership with Pemex.

Economic Growth

The economy of Mexico has shown signs of recovery in the past few months, with the economy growing 1 percent in the April-June period compared with the previous quarter, after a weaker-than-expected beginning of the year.

Corona said the embassy had been in conversation with potential Malaysian companies, including Petronas, over the bids.

"This is a very good chance for Malaysian industry players who have the expertise in these areas," he said.

Since mid-2012, Mexico has posted modest growth as exports to the U.S., Mexico's main trade partner, slowed down. In 2013, the economy expanded just 1.1%, the slowest pace since the 2009 recession.

Corona said the bilateral trade between Malaysia and Mexico is very important as Malaysia is their main partner in Southeast Asia.

The bilateral trade between Malaysia and Mexico hit $5.55b in 2013 while in the first quarter of 2014, the volume stood at $1.388.

Mexico exports electrical and electronic equipments, machinery, and precious metals to Malaysia and imports rubber, plastics, wood, copper, and chemical products from the Asian country.