Mexico must compete for global capital to unlock energy resources: panelists

Mexico needs to maximize private investment and launch a new exploration cycle to develop its energy resources, industry executives said, warning that the country must compete with projects worldwide for a limited pool of capital.

Attracting that capital will require Mexico to combine its substantial resource potential with competitive fiscal terms, regulatory certainty and projects capable of generating attractive returns, panelists said during S&P Global Energy's 2026 Mexico Briefing on Oct. 1.

"All projects compete for the same money," said Raymundo Piñones, Woodside Energy's country manager for Mexico.

Every dollar invested in Mexico is competing with opportunities elsewhere, so the quality of the country's resources is only one part of the investment case.

Fiscal competitiveness, political risk, regulatory certainty, capital efficiency and expected cash flow increasingly determine where companies deploy their money, the panelists said.

The criteria governing those decisions have also changed substantially.

Oil companies were previously rewarded for accumulating reserves on the assumption that demand would continue growing, but investors now place greater emphasis on capital discipline, Piñones said.

"What is evaluated now is capital efficiency and cash flow," he said, adding that investor expectations regarding governance and corporate performance have also evolved.

For international oil companies, the competition is not limited to individual Mexican projects. Capital can be redirected to other countries, regions and technologies, increasing pressure on Mexico to offer investment opportunities that can compete globally.

Mexico nevertheless enters that competition with considerable advantages, including geological diversity, substantial underexplored potential and proximity to the US market, the panelists said.

"Few countries are fortunate enough to have resources distributed across different types and regions," said independent analyst Alma America Porres Luna.

Turning that potential into production, however, will require renewed exploration, particularly as existing fields mature and the country seeks to sustain oil and gas output over the longer term.

Resource quality alone will not determine whether that investment arrives.

"Investors also compare fiscal frameworks and political risks across producing countries," said Gustavo Baquero, Harbour Energy's head for Mexico.

Countries that have been most successful in attracting capital are those that maintain stable regulations and contractual conditions despite political transitions, Baquero said.

Mexico, therefore, needs to demonstrate that its regulatory architecture works and that companies can invest with a reasonable degree of long-term certainty, Piñones said.

The challenge extends beyond upstream oil and gas. Power-sector executives at the event said Mexico's ambitious electricity-development goals will similarly require substantial private investment, particularly as rising demand increases the need for new generation and supporting infrastructure.