Texas has always been the hub of U.S. energy, but with its southern neighbor Mexico opening up oil and gas reserves across the border texas law firms are moving in to take advantage.
Several Texas firms have said they are either planning to open in Mexico or set up relationships with Mexico firms. The opening up of the oil and gas markets gives access to foreign investors in a way they have not had in 75 years.
International firms have increasingly been focusing their attention on Texas in the last few years – opening offices and then building them up rapidly, according to JD Journal.
Some firms are also going directly to Mexico. Jones Day, for instance, had 31 lawyers when it opened in Mexico City in 2009. Now it has 74, with plans for another 10 in the next few months. Luis Gomar of Strasburger & Price in Mexico City said that the legal changes in the energy market are about to “transform the legal market in Mexico’ and that they will ‘transform the country, period”.
At the same time, however, Mexico’s timing on the shale revolution couldn’t be worse, Bloomberg reports.
According to Bloomberg, as a flood of supplies from Texas to North Dakota sends oil into a nosedive, U.S. producers are reducing investment budgets for 2015. The cuts dim the chances they’ll take their fracking and horizontal drilling capabilities down south anytime soon.
After changing the constitution last year to allow foreign oil investment into its territory, Mexico is having to adjust, too. Regulators are considering reworking and potentially delaying leases for the country’s portion of the giant shale formation that encompasses the Eagle Ford in Texas.
“They’re going to have all of the issues of depressed price that the people in the Eagle Ford are having now,” said Michael P. Darden, global chair for oil and gas transactions at law firm Latham & Watkins LLP in Houston.
