Wanting to get more out of its vast oil reserves, Mexico has officially opened up its petroleum industry to foreign businesses following more than 75 years of state monopoly over fossil fuels.

Mexican President Enrique Peña Nieto characterized the decision as “a great opportunity” for his country, which sits atop 20 billion barrels of oil still to be developed.

“I’ve told different areas of the government to accelerate all of the measures necessary to put this reform into action for the good of Mexico,” Peña told reporters in Mexico City.

The change in energy policy means Pemex, the state-run oil company, will cease to have complete control over oil and gas production for the first time since 1938. Foreign oil companies will now be able to bid on oil projects, particularly those in the Gulf of Mexico, where there has been almost no exploration south of the border. Pemex will also get a piece of that exploration and will partner with other companies to get the deepwater technology needed there.

Mexican leaders had grown tired of Pemex’s declining productivity, losing about one million barrels per day over the past 10 years despite the nation’s vast stores of untapped petroleum.

Pemex will still enjoy substantial control over most of Mexico’s “proven and probable reserves,” Ari Phillips of Think Progress reported. But the company will “only keep a fifth of prospective resources, including yet-to-be-discovered resources.” The other 80% of new oil will be accessible to U.S. and other foreign oil interests.

Peña is hoping the decision yields about $50 billion in foreign investments over the next four years. In doing so, the hope is Mexico will increase output to 3 million barrels a day by 2018.

-Noel Brinkerhoff

To Learn More:

Mexico Opens Oil Fields, Expects Rush of International Companies Across the Border (by Ari Phillips, Think Progress)

After 76 Years of Nationalism, Oil-rich Mexico Welcomes Foreign Capital (by Dolia Estevez, Forbes)

Mexico Outlines Plan to Open Oil Fields to Private Companies (by Laurence Iliff and Juan Montes, Wall Street Journal)

Frackers Get Set to Cross the Border into Mexico (by Noel Brinkerhoff, AllGov)