View article

As the implementation of Mexico’s historic energy reform gets underway, the debate has tended to overlook a key question at the intersection of technology and the new legislation: How can Mexico create an institutional framework supported by policies, laws, and organizations to facilitate technology transfers and foster local innovation? Simply put, how will international oil companies (IOCs) transfer technology to Mexican companies and research facilities? What technological advancements in and for Mexico will accompany foreign investment in the energy sector?

These questions are central to the success of the reform. Mexico expects both capital and technology to flow into the energy sector, and, in turn, reinvigorate its hydrocarbons potential. This expectation, so far largely implicit, is based on several key facts. First, Mexico’s education system is not churning out enough engineers to satisfy future demand. 1 At the same time, Mexico does not have the technology to tap into deep-water reserves. Finally, there is a lack of a substantial base of specialized services and suppliers in the domestic energy industry. Thus, in terms of technology transfers, the approach taken by the government in the energy sector appears similar to other liberalization processes. It rests on the notion that market competition can be achieved by lifting regulations that once prevented capital and technology from entering the national market. The assumption is that all interested players