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Mexico's Oil Revolution

Pemex' production has been declining since 2004, to the point where Kinder Morgan Energy Partners (KMP) has actually begun exporting natural gas to Mexico through its pipelines. Successful new strikes could bring the whole economy back, as they have brought the U.S. back.

While it's "big oil" that's being talked about most here, I suspect Nieto's plan may provide a bigger boost to some smaller U.S. exploration companies with Mexican-American leadership, like Sanchez Energy (SN - Get Report), headed by a former Texas gubernatorial candidate, Tony Sanchez, and his son.

Sanchez is just now moving beyond its original niche in Texas' Eagle Ford shale, buying leases in what's called the "Tuscaloosa Marine" play, extending across the center of Louisiana into Mississippi. That experience could set the company up to deal with a partner like Pemex.

Such a smaller company, run by Mexican-Americans, might be welcome in the Texas-Mexico border areas, where Pemex is currently planning to invest $200 million in exploration, according to EagleFordShale.com

Rather than giving away the country's "patrimony," in other words, Pena Nieto is trying to bring in technology and create new partnerships in an atmosphere of mutual respect. Anyone who thinks the pre-1938 oil rush of multinationals buying Mexico is about to come back may be in for a surprise.

At the time of publication the author had no position in any of the stocks mentioned but his wife's family has a lease on its land with Sanchez Oil.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Dana Blankenhorn has been a business journalist since 1978, and a tech reporter since 1982. His specialty has been getting to the future ahead of the crowd, then leaving before success arrived. That meant covering the Internet in 1985, e-commerce in 1994, the Internet of Things in 2005, open source in 2005 and, since 2010, renewable energy. He has written for every medium from newspapers and magazines to Web sites, from books to blogs. He still seeks tomorrow from his Craftsman home in Atlanta.
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